Unit Trust Game Rule #2

Here come rule #2 .....





Dollar Cost Averaging ??!!

3 things:
1) Works well in a highly volatile market to accumulates more units at a lower average cost
2) Cushion the impact of a falling market
3) Ignore Timing Issue




What you do is : you save a fixed amount of money every month in buying Unit Trust Fund.

First, Invest in UT lower down your risk if compare to invest directly in share market. Dollar cost averaging will 'lagi' lower down your risk in investment.

It works very logically. If the NAV is rising, should we invest more ? NO. Hence, with the same amount of $$, we buy less unit. If the NAV is dumpling down, why not we buy more ? Hence, with the same $$, we buy more unit.





Second, it is forced saving, promise yourself every 1st of the month, save the $$ into the UT account.

Do you know why your highest amount saving account is EPF ? Because it is forced saving. You save into that EPF account before you can event withdraw a cent for spending, that's why you have huge amount there. Same go for this, if you plan to save for longer term, think about saving into UT too, beside putting them into FD only.





Third, it is stress-less.


No sweat if the market rise, less sweat when the market fall. Because, you know you will buy less when the market is already 'high', and you are buying more when the market is 'low'.





Below is a chart showing the total return for a patience investor start with RM1000, and keep saving RM200 each month from the first day the fund launched and until to-date.







Hence, do your dollar cost averaging, for UT, for FD (opppsss... FD rate don't change too much), foreign currency etc etc .....