Dollar Cost Averaging with PAC or Payroll Plans
When you contribute through a Pre-Authorized Contribution
(PAC) Plan or Payroll Deduction, you take advantage of Dollar Cost Averaging. Dollar Cost Averaging takes the guesswork out of investing. It forces you to
buy more shares or units of a security when the price is low and fewer shares
or units when the price is high. You can buy at the best price without the
stress of trying to actively time the market.
Example:
| Date |
Investment |
Price |
Units |
| January |
$150 |
$10.00 |
15.000 |
| February |
$150 |
$9.00 |
16.666 |
| March |
$150 |
$10.00 |
15.000 |
End of March - Total Investment=$450.00
Market Value $10 x 46.666=$466.66
By taking advantage of dollar cost averaging, your investment is worth
$466.66 but only cost you $450.00. You have effectively timed the
market, buying more shares when the price was low and fewer shares when the
price was high - and you were able to sleep at night! An appealing combination,
don't you think?
Templeton provides a good example of how this works in their PAC
plan example.
Most funds from ScotiaMcLeod are available for as little
as $50 in PAC & Payroll plans. Any fund with a 6 or 7 digit
PAC number is also available for
payroll deduction.
Start Today!
For payroll deduction within your group plan, contact your regional ScotiaMcLeod Wealth Advisor or your HR representative. To start a Pre-Authorized Contribution plan from your bank account, download PAC this plan form and send it to your regional ScotiaMcLeod Wealth Advisor.
More on Dollar Cost Averaging
The information contained on this website is for use by persons resident in Canada only.
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