Automatic Periodic Investing

Investing a fixed dollar amount automatically on a monthly basis is an excellent way of investing. This strategy not only forces one to save that amount every month (and not spend it), but also offers the investor the following advantage. When markets, and therefore your investment drops in price, your fixed dollar amount being invested allows you to purchase more units for the same amount. As time prices and markets stabilize and increase, those extra units you purchased will increase the value of your investment. The program is easy to set up. All that is needed is a voided check and the purchases are made directly by the fund company from your account.

Advantages :

• Creates a disciplined and forced savings strategy.
• Reduces anxiety caused by market pullbacks by allowing you to purchase more units at lower prices resulting in better long term performance.
• Slowly and steadily creates a little cushion for future needs such as an unforeseen expense, child's post secondary education cost, a vacation etc.
• Avoids the last minute RRSP rush where you need to contribute a higher amount.
• Amounts invested start to earn earlier.
• Balances and simplifies your budget.

Three Scenario Comparison