Average CostUsing Average Cost Method
Average cost method is also known as fixed investment method, which refers to buying a fixed amount of assets at specific intervals (e.g. monthly).
The average cost method in investment refers to buying more units at lower prices and buying less at higher prices. In the long-term, the average cost of units in the investment portfolio will be lower compared to single investment method. Therefore, you can invest wisely regardless of market situations.
According to historical data, the value of economic performance and asset price will increase in the long-term. However, the increase will not be a straight up one, in which significant volatity will exist. From the chart below, you can see that regardless of market situations, you can obtain relatively stable returns using the average cost method systematically in the long-term.