Our weakness as retail investors is that we do not have enough capital to trade in the stock market / forex, let alone buy in bulk. Not a problem. We can pay by installments for example, every time you get a salary for the 'saved' in the form of stock / Forex.
This strategy quite effective because in the time investment is very important. The sooner you start investing the proceeds that will be received will be even greater. You do not need to wait to have a few hundred million or a billion, so you are able to invest. Should you choose a broker or securities which do not provide a minimum commission per transaction day.
This strategy is also useful to deal with fluctuations in the price of the stock / forex from time to time. Thus, this strategy called diversification of risk based on time. As an illustration, look at the following image, images show the fluctuations of stock prices in the the last 1 year.
Imagine if you spent all your money directly in July (7) where the prices are high, you can loss.
The following table shows the differences in at page when you make an investment saving each month. For example you set aside your money every month to buy 1 lot of shares X.
Every Month
|
1 Lot Stock X at price
|
January
|
Rp 3,000
|
February
|
Rp 3,200
|
March
|
Rp 3,150
|
April
|
Rp 3,450
|
May
|
Rp 3,200
|
June
|
Rp 3,550
|
July
|
Rp 3,750
|
August
|
Rp 3,600
|
September
|
Rp 3,400
|
October
|
Rp 3,200
|
December
|
Rp 3,100
|
Average
|
Rp 3,333
|
At the end of the year you have the savings of stocks a total of 12 lots with an average of Rp. 3333. The price obtained is not too low not too high.
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