Ringgit Cost Averaging - Conceptual Trading

…they should buy over time. They are not going to be able to pick the right price at the right time.” - Warren Buffet, the greatest stock investor of all time


Dear valued investors.

In view of the current volatilities in the stock markets, many investors are unsure how to proceed with their investment plans to achieve their medium-to-long term goals. Public Mutual is pleased to offer u a Ringgit-Cost-Averaging plan to accumulate your investments to achieve a lower average cost for better medium-to-long term returns.

Ringgit-cost-averaging is a systematic savings & investment plan of investing a fixed amount of Ringgit into an investment whose prices vary from time to time. The result of this disciplined approach is a lower average cost in the long run resulting in a bigger gain when prices go up.

Investors will not have to worry about the prices dropping or fluctuating as lower prices mean they get more units. This plan takes the emotions out of investing & has been proven to give good returns in the long run. Unit trust investments work best with regular investing thru the above Ringgit-cost-averaging method together with a medium-to-long term investment time horizon.


To illustrate this principle:

If u bought RM10,000 of an investment at RM1.00, u would receive 10,000 units & your average cost would be RM1.00.

If the price of that investment were to drop to RM0.50, buying another RM10,000 would average down your cost to RM0.6667 & NOT RM0.7500:

RM10,000 @ RM1.0000 = 10,000 units
RM10,000 @ RM0.5000 = 20,000 units
Total RM20,000 = 30,000 units

Average cost = RM20,000/30,000 units = RM0.6667 per unit

When the price goes up to RM0.7500, u would have made a profit.