Pound cost averaging is best described as the technique of choosing to make your investments on a regular basis and averaging out the cost of your total investment over time. If you invest the same amount of money each month and the share price is down you get more for your money than when the share price is rising. This technique can iron out the ups and downs of a share or fund price over time, and can take away the worry of finding the right time to invest.
Investing little and often is a good way to take the first steps towards building a portfolio for the long-term future.
|Regular Investment||Shares Purchased||One off investment||Shares Purchased|
|Value of shares at month 5||£580||Value of shares at month 5||£500|