When you invest regularly through a SaveUP Regular Savings Plan (RSP), you buy more shares when prices are low and fewer when prices are high. This averages out your purchase price over time, potentially reducing the impact of market volatility.
SaveUP encourages regular investment, promoting financial discipline through long-term wealth accumulation regardless of short-term market fluctuations.
Instead of trying to time the market (which is notoriously difficult), SaveUP spreads out your investments, reducing the risk of making a large investment just before a market downturn.
In a scenario where a stock's price varies between $5 and $10 over the next 12 months, investors who consistently invest $100 each month would have invested a total of $1200 over the year. The following chart illustrates how a dollar cost averaging strategy can potentially be more advantageous compared to a lump sum investment.
If you invest a lump sum of $1200 during a bull market, you might buy shares at a peak price of $10 each. However, using a monthly $100 Regular Savings Plan (RSP) allows you to invest at different price points, especially when the share price drops. This dollar-cost averaging strategy can result in a lower average share price over the course of a year compared to a lump sum investment.
This example is for illustrative purposes only and does not guarantee future returns.
Click on “SaveUP” in your dashboard.
