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Dollar Cost Averaging

Dollar cost averaging offers an alternative to “buy low, sell high” strategies that require the investor to speculate on the timing of an investment. Rather than a one-time investment that may prove to be poorly timed, dollar cost averaging invests a fixed amount regularly into a particular investment, regardless of unit price.

When unit price is high, the same amount buys fewer units.
When unit price is low, the same amount buys more units.
 
This prudent investment technique reduces the effects of short-term market fluctuations on investments by averaging out the costs of your units over time.

As you make regular contributions to your MPF fund at regular intervals, you are effectively using dollar cost averaging without even thinking about it.

Last Revision Date: 19/10/2012