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By investing regularly, you will buy more shares when the price of a stock falls, and less shares when that stock's price rises. This is called dollar cost averaging, and it is an approach which helps smooth out the peaks and troughs, thus offsetting market volatility by letting you buy stock at an average cost which is typically less than the average market price. And, providing there is overall growth in the stocks you select, you do not need to worry about timing, just making profit in a risk-reduced fashion.
Example: Assume your monthly investment amount is HK$5,000 with a handling fee of HK$50 (For reference only; does not reflect actual circumstances):
Month |
Investment
(HK$) |
Amount available
for share
purchase*(HK$) |
Share
price
(HK$) |
Number of
shares
purchased |
Amount
invested (HK$) |
| 1st |
5,000 |
4,942.55 |
3.00 |
1,647 |
4,941.00 |
| 2nd |
5,000 |
4,942.55 |
2.80 |
1,765 |
4,942.00 |
| 3rd |
5,000 |
4,942.55 |
2.45 |
2,017 |
4,941.65 |
| 4th |
5,000 |
4,942.55 |
2.76 |
1,790 |
4,940.40 |
| 5th |
5,000 |
4,942.55 |
3.13 |
1,579 |
4,942.27 |
Total
|
8,798 |
24,707.32 |
Average cost per unit (HK$)
= total amount invested / total number of shares purchased
= 24,707.32 / 8,798
= 2.81
*Amount available for share purchase
= Monthly investment amount - Handling fee (0.25% of monthly investment amount or HKD50, whichever is higher) - Transaction cost (such as stamp duty)
For more information, please call our customer service hotline at (852) 2822 5001 or email us at cs@shkf.com.
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