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At Van Kampen Investments, we encourage you to work with your financial advisor to build a long-term strategy that may weather all kinds of market conditions. Dollar-cost averaging is one strategy you and your advisor may consider when discussing your long-term investment plan.
Dollar-cost averaging involves investing a fixed amount in a particular investment at regular intervals. Because the amount you invest remains constant, you buy more shares when the price is low and fewer shares when the price is high. As a result, the average cost you pay per share may be lower than the average market price per share during the time you are investing. |
|
Contribution |
Investment |
Price per Share |
Shares Bought |
|
1 |
$200 |
$10 |
20 |
|
2 |
$200 |
$5 |
40 |
|
3 |
$200 |
$4 |
50 |
|
4 |
$200 |
$10 |
20 |
|
5 |
$200 |
$8 |
25 |
|
Totals |
$1000 |
$37 |
155 |
This hypothetical example is provided for illustrative purposes only and is not meant to depict the performance of any specific investment.
Average cost per share: $6.45
(Total investment divided by total number of shares bought)
Average price per share: $7.40
(Sum of share prices divided by the number of contributions)
Dollar-cost averaging may offer the following benefits:
- The ability to buy more shares at a lower price.
- The potential to build a significant portfolio over the long term, through smaller incremental investments.
- The convenience of budgeting for a regular investment,
especially if you set up an automatic investment.
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A Van Kampen Automatic Investment Plan (AIP) offers you the convenience of having regular investments transferred directly from your bank account to the mutual fund(s) of your choice. For more information download the
form or contact your financial advisor.
A
voided bank check is required with all applications. Automatic investment
plans cannot be set up for less than $25 per fund ($100 for senior loan
funds).
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A program of regular investment cannot ensure a profit or protect against a loss in a declining market. Since such a program involves continuous investments regardless of fluctuating share values, you should consider your financial ability to continue the program through all market cycles.
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Investor Services representative, call (800) 847.2424. |
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