The Reliability of Investing Regularly

"Buy low, sell high". Investors should know this and many try their hand at 'timing' the market.

Thing is, volatility is part and parcel of the market cycle. Every investor wants to buy cheap and sell for a profit. Many will fail. Product factsheets acknowledge this with the famous "past performance is not an indicator of future performance" line. Since no one can really 'time' markets consistently, trying to anticipate price movements is an unreliable approach to investing.

Then, there are emotions. Fear often sees investors miss out on opportunities when markets look bleak. Conversely, greed often results in over-investing during boom times.

Merits of a regular plan:

Investing without significant capital
Complete control over your monthly investment amount, from as little as SGD100 a month
Avoid pitfalls of timing the market by avoiding the 'right' time to invest your capital as a lump sum
The 'magic' of compounding. The earlier you invest, the greater your ability to grow your wealth

A regular savings plan, or RSP, overcomes the hurdles of timing and emotions. Also known as dollar-cost-averaging, the approach involves buying a fixed amount of investments every month, no matter how good or bad markets look.

It takes the stress out of investing, as investors do not have to decide if the fund is expensive or not, and if market conditions are right to invest. Each month, the money goes like clockwork into pre-determined investments. Doing so can smooth out price bumps, and result in a lower average unit cost. At DBS, such plans can be put in place from as little as SGD100* a month.

RSP also offers a way of investing with less. With investors increasingly buying their first investment at a younger age, many may not have the ability or luxury of investing a large initial lump sum. Another benefit to starting RSPs early: the 'magic' of compounding means investors have more time to grow the nest egg to a sizable amount.

*A minimum initial investment sum of SGD1,000 may be required, depending on the fund.

Total Invested: SGD500

Average cost of each unit bought: SGD0.98 (SGD500 / 511.35 units)

Average price of each unit in the same period: SGD1.00

You pay: SGD0.02 less per unit

Month	Investment Amount	Unit Price	Units Bought
January	SGD100	SGD1.00	100
February	SGD100	SGD1.25	80.0
March	SGD100	SGD0.90	111.1
April	SGD100	SGD0.80	125.0
May	SGD100	SGD1.05	95.2