RAND COST AVERAGING
25 May 2016 By PDSNETThe idea of buying more of an investment after a large price move so that the average price is less volatile. Unit trusts make much of this idea because most investors buy small quantities of units on a regular monthly basis. If the market falls and they keep buying then naturally the average price which they have paid will come down - and vice versa. This is certainly a method for reducing the risk in share market investment, but unfortunately it also reduces the return.
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