Cost Averaging
How does
an individual protect his or her investments from volatility in the
stock market ? The answer to this is the age old adage "keep investing
regularly". How does regular investing help ? The simplest answer
seems to be that an investor can keep investing even if he does not
have a large amount of money to invest. Also with regular investment
money that has been earmarked for investment does not go towards spending.
Regular
investing brings "cost averaging" into play. The important
point to keep in mind over here is that the drop in price should be
because of external performance and not due to dip in fundamental performance
of the company
