A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc. depending upon the investment objective of the scheme. Each investor (unitholder) thus gets an exposure to such portfolios with an initial investment as little as RM500/-. Thus it is affordable for an investor to build a portfolio of investments through a mutual fund rather than investing directly in the stock market.
By investing regularly through a bank debit program, an investor can build on the initial investment and accumulate his/her investment steadily. The more you have invested, the greater your potential for future growth. The fund managers credits the units each time they receive your investment and also rolls over distributions into new units into your account.
By investing regularly through a bank debit program, an investor can build on the initial investment and accumulate his/her investment steadily. The more you have invested, the greater your potential for future growth. The fund managers credits the units each time they receive your investment and also rolls over distributions into new units into your account.
Dollar cost averaging
When you invest on a regular basis, you’re using a strategy called dollar cost averaging. By adding a similar amount of money on a regular basis you can reduce your cost per share in the fund below the actual average cost of a share over the period you invest.
There’s no guarantee you’ll make money with dollar cost averaging. If the fund price declines and doesn’t bounce back eventually, you could lose some of your investment. But in general, dollar cost averaging can reduce the risk that you’ll invest all of your assets at the market peak.
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