Cost average effect

Cost averaging principle applies in the context of the s investment plan (i.e. when regular fixed payments are made to an investment plan). When you regularly invest a consistent amount in securities, you buy more units when prices are low and fewer when they are high. These regular purchases result in an average price of the investment - called the cost-average effect. This may prove to be advantageous compared to a one-off investment, especially when prices fluctuate trongly. However, a steady market development can also have a negative effect, making a one-off investment more favorable.
Please note: An investment in securities carries risks as well as opportunities.