Grow your wealth with Canada Life’s dollar cost averaging investment strategy
Canada Life - Dec 28, 2022
Dollar cost averaging can simplify timing your investments
In times of market volatility, it’s natural to feel unsure about when to invest. But a dollar-cost averaging strategy can lower the overall impact of volatile markets. It may seem counterintuitive, but it’s a great way to capitalize on an up-and-down market.
Dollar-cost averaging is an investment strategy that helps reduce the impact of market volatility by spreading out your fund purchases over time. Making smaller regular purchases instead of one big purchase can help you lower your investment costs and boost your returns over the long term. These regular intervals help you especially in uncertain markets by an automatic pacing regardless of the current price.
How does it work?
By spreading out your investments at regular intervals, and in equal amounts, you’re spreading the purchase price over time by lowering the overall average costs of your investments. This ensures you’re not using all your money when it’s a high point for pricing in the market. Buying regularly in up-and-down markets can help you avoid a poorly timed lump sum investment at a high price.
Why it works
Dollar-cost averaging can work because even though prices tend to rise, they don’t rise consistently or in any predictable pattern. This strategy eliminates the effort of trying to time the market to buy at the best price.
Canada Life has segregated funds designed for the dollar-cost averaging investment strategy that accommodates several payment frequency options such as weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annually and annually. This flexibility can provide you with greater ability to customize your investment strategies that suit you best so you can grow your wealth.
Want to learn more about how dollar-cost averaging and how you could benefit? Contact me.