Planning your investment: Step 3 - Know the concepts of investing: Ringgit Cost Averaging
"Ringgit cost averaging" is a technique widely practiced in the unit trust industry.
It involves investing a fixed amount of money for specified interval such as monthly, quarterly or yearly regardless of how the stock market performs.
When fund prices are higher, the additional money invested will buy fewer units but when prices are lower, the same amount of money allows you to buy more units.
Implicit in this approach is that at some point in time, markets will recover as they move in cycles, at which time profits can be taken.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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