It is a well known fact that putting your money into a savings vehicle at the beginning of the year is more fruitful than at the end. Likewise it is better to accumulate your savings monthly in advance than annually in arrears. There is one additional advantage to systematically monthly over annually.

 

It is called Dollar Cost Averaging.

Market values are constantly changing, one day they are up, another day they are down.  The chart illustrates the point for a $12,000 investment one made on January 1 and the other spread over four quarters of $3,000 each. the investment is made into a segregated fund.

 

 

Date

Unit Value

Units

FMV

A) January 1

$10.00

1,200

$12,000

B)    Jan 1

$10.00

300

$3,000

B)  April 1

$8.00

375

$3,000

B)   July 1

$9.00

333.33

$3,000

B)   Oct 1

$12.00

250

$3,000

A)   Dec 31

$11.50

1200

$13,800 (15%)

B)   Dec 31

$11.50

1258.33

$14,471(20.6%)


As you can see by spreading the investment over several months the growth is enhanced.

For a frank discussion to further explore this concept and strategy please get in touch.


  • No comments found
badlands.jpg Eaton's Center.jpg Brock U.jpg Hamilton.jpg Via_1.jpg Rogers Center 2.jpg Western U.jpg CottageCountry2.jpg Moose.jpg HartHouse, TorontoON.jpg cottagecountry.jpg Ukranian Church.jpg CFL TigerCat Cheerleaders, Hamilton, ON.jpg escarpment.jpg UnionStation.jpg toronto harbour.jpg parliament.jpg Queens U.jpg Goose1.jpg Guelph U.jpg vineyard2.jpg Burlington.jpg Halton Country.jpg Sunset1.jpg WindMill.jpg Niagara vineyard.jpg Niagara falls.jpg Queens U 2.jpg Croatian Franciscan Centre.jpg Wolf Lake.jpg Rogers Center 1.jpg LondonSkyline.jpg lightning.jpg Yonge St.jpg Lake Muskoka.jpg Hockey Hall of Fame, Toronto, ON.jpg ROM1.jpg York U.jpg TorontoWaterFront.jpg Univerity college U of T, Toronto, ON.jpg CanadianRail.jpg RoyalYork.jpg Rogers Center-football.jpg TorontoBeach.jpg Pearson.jpg