The tables below show why this is a powerful way to build wealth.
If you invest $100 each month when prices are falling, you buy more units/shares. In the example below, it may not have been emotionally rewarding to buy at $6.50 per unit (month 12) as compared to $10.00 per unit (month 1). For a long-term investor, there is a significant difference in growth on 15.38 shares compared to the 10.00 you received for your $100 in month 1.
Side by Side Comparison
The comparison below demonstrates clearly that dollar-cost averaging is a successful strategy in all types of markets but the most beneficial is purchasing when prices are dropping.
The information in this commentary is for informational purposes only and not meant to be personalized investment advice. The content has been prepared by Jan Fraser, Fraser & Partners Investment Services of Aligned Capital Partners Inc. (ACPI) from sources believed to be accurate. The opinions expressed are those of the author and do not necessarily represent those of ACPI.