You might be reluctant to start investing as you might not have a big enough lump sum to start. But by using a regular savings plan with the IOOF Integral Master Trust, you don't need to wait, you can start your investment plan today.
But the benefits don’t stop there. Regular savings plans take the hassle out of investing as you don’t need to complete new application forms each month. They are often referred to as “forced savings”, where the behaviour just becomes part of your normal routine and therefore you benefit from remaining committed to your investment plan.
One of the biggest benefits of regular savings plans is dollar cost averaging. In essence this means that by contributing regularly you are investing at different unit prices and at different stages of the economic cycle. If you average these investment prices out, your overall average price may be lower than if you invested a lump sum at the highest point.
The theory behind this strategy is that you can reduce the market timing risk of investing your entire portfolio in a single transaction on what might be an expensive entry point. In other words, if you invest a lump sum on a day when the market is up you will purchase a lower number of units compared to a day when the market is lower. By adopting a dollar cost averaging strategy you can spread out your investment entry points and potentially achieve a lower average cost base, which means you purchase a greater number of units for the same (investment) amount.
Talk to your adviser today about investing with a regular savings plan in the IOOF Integral Master Trust. If you don’t have an adviser, click here so we can help you find one.