Last year saw some big ups and big downs in the markets. The good news? When financial markets are turbulent, they present a golden opportunity to buy investments at lower prices.

An easy, effective way to do that is through dollar-cost averaging. This strategy involves investing a fixed amount at regular intervals, no matter how markets are performing. When markets dip and investment prices fall, the amount you regularly invest buys more shares or fund units. Over time, this can reduce your average cost and, in a rising market, increase your returns when you sell.

How dollar-cost averaging works

Here’s an example to show how it works. Suppose you decide to invest $1,000 a month in the fictional ‘ABC Fund’. Over a six-month period, the price fluctuates between $20 and $25, with the following results:*

Setting up a dollar-cost averaging program is fast and easy. Money can be transferred automatically from your bank account or other sources to regularly buy mutual funds units. When you purchase mutual fund units, fund distributions are automatically reinvested in additional fund units, augmenting your strategy.

You can invest monthly, quarterly, or semi-annually – whatever is most convenient for you.

Talk to us about how dollar-cost averaging can work for you. We’ll be happy to help you select appropriate funds and choose the frequency and amount that’s right for your budget and investment goals.

* Example provided for illustration only; excludes commissions, fees, taxes.