Portfolio matters: Timing your entry

Key Points In theory you should buy in one upfront hit But, psychologically, averaging in makes sense We run through some of the practical factors you’re likely to face Staggering your purchases of a new fund, or ‘averaging in’, has the advantage that your average buy price will certainly be below the highest price you paid over the period you were buying. The disadvantage is that it will certainly be above the lowest price you paid. This seemingly trite explanation gets to the heart of the issue of ‘averaging in’. Let’s consider a simple example. You want to invest...

Staggering your purchases of a new fund, or ‘averaging in’, has the advantage that your average buy price will certainly be below the highest price you paid over the period you were buying. The disadvantage is that it will certainly be above the lowest price you paid.

This seemingly trite explanation gets to the heart of the issue of ‘averaging in’. Let’s consider a simple example.

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