Introduction

Over the last 100 years global share markets have experienced many major set-backs, including the Great Depression of the 1930s, several wars, the ‘crash of 1987’ then the Global Financial Crisis twenty years later. But for every low, a recovery has followed – they just take time.

What stops most people from investing in (or returning to) the share market is not knowing when to jump in. Although nobody knows exactly when a market or a particular share price has found its base price, we can employ a strategy to remove this speculation and focus on a longer term investment plan.

Introduction

It’s easier to show how this works, than explain it. Here’s an example of investing $250 a month over 12 months into a hypothetical managed fund

Introduction

You've probably heard of dollar cost averaging as a way to grow your investment portfolio. It’s not the “be all to end all” for investing, but it can certainly help you make the most of investment markets and economic conditions over the long term.

Dollar cost averaging is quite simply investing a fixed amount at set intervals so an investor buys more units/shares when the price is low and less when it is high. Over time the costs average out and the investor usually ends up with more assets than if they were “timing the market” (which is a definite no-no).

Other benefits of dollar cost averaging include: