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.
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 available for payroll deduction.
ScotiaMcLeod is a division of Scotia Capital Inc., member of CIPF.
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