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Monday, 16 October 2017

Decoding the Rupee Cost Averaging Strategy

"More Wait, Less Fluctuation"
By using Rupee Cost approach, you avoid the complex or even impossible duty of trying to figure out the exact best time to invest. Rupee cost averaging is an approach in which you invest a fixed amount of money at regular intervals. This in turn ensures that you buy more shares of an investment when prices are low and less when they are high. This automatically falls in line with the age-old principle of buy low and sell high. The rupee cost averaging effect - averages out the costs of your units and hence lessens the results of short-term market fluctuation on your investments. This is the system followed in SIPs (Systematic Investment Plans) of mutual funds.
Getting it right:
Decide on the amount you can invest on a regular and long-term basis
Select an investment you want to hold for the long-term
Invest at regular intervals (weekly, monthly or quarterly)


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