AskI plan on investing 50% (270T) of my total investment fund in Medium Risk invesments, particularly, via COL’s EIP program. Needless to say, I will be using a cost averaging approach. I’m just confused if cost averaging means investing the a consistent initial amount and succeeding top-up amount in a stock or is it okay to invest a bigger inital amount, let’s say 30T of the 270T initially and then top-up 10T or more a month after that?
Any suggestion regarding how to approach cost averaging is greatly welcomed. š Like is it better if I top-up quarterly rather than monthly or how much would be substantial for my monthly top ups, etc.
I would just like to note that the money I have set aside for investment is money that I have already committed to be purely invested in the long term (at least 3 years). š
Tags: cost averaging, stock market
3 Responses to “Stock Market Cost Averaging”
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Cost Averaging is realy just investing a specific amount in regular intervals. usually the amount is dictated by how much you can spare/save. In your case though, it seems like you have the money and will just be sitting on it for the time being.
There should be no problem with a higher initial investment.
Fitz has written three articles on Cost averaging. i tried posting the links here, but it seems the site doesn;t allow me to (anti-spam i guess).
try loking for these topics in Fitz’s blogs:
how to do cost averaging
how to pick the right stocks for cost averaging
Yeah, anti-spam. I allowed it once but the link spams are just uncontrollable, sorry.
Anyway, here’s the link Mr. Earth Bound:
How To Do Cost Averaging Part 1
You’ll get the links of the other two parts there.