Invest Smart with Ringgit-cost Averaging Strategy
We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.
What is RCA ?
- Long-term investment technique
- Investing a fixed amount of money into a given investment on a regular basis, regardless of the price
- Helps reduce the risk associated with investing a single large sum
The Benefits of Practising RCA :
||Competitive Returns in the form of Capital Gains and/or Distributions
||Regulated by Securities Commission Malaysia (SC)
^ For selected funds
How does RCA work ?
Knowing that it is difficult to predict the market movement, Raymond practises RCA by investing RM950# every month over a period of 10 years. By doing so, Raymond managed to average out the cost per unit held. This is because the RM950# he invested every month purchased more units when prices were low, and less units when prices were high.
Monthly Investment RM950#
- Total investment cost over 10 years: RM114,000
- Total units accumulated over 10 years: 558,990.28*
- Average cost per unit held:
RM114,000 / 558,990.28 units = RM0.2039*
#RM950 is net of sales charge.
*Based on the net asset value (NAV) per unit1 of Public China Select Fund for the period from July 2009 to June 2019.
1Adjusted for distribution of 0.50 sen per unit declared as of 31 July 2018.
- Start as soon as possible to build a sizable account over time.
- Stay invested for long term regardless of price fluctuations.
- Take advantage of Direct Debit Authorisation (DDA) and Regular Investment Authorisation (RIA) via Public Mutual Online.