Richard Cayne Meyer International Ltd on Dollar Cost Averaging

1. DOLLAR
COST
AVERAGING

2. Example One:
Averaging in an Increasing Market
Unit Price
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
$16.00
1 2 3 4 5 6 7 8 9 10 11 12
Units Purchased
100
95
90
86
83
80
76
74
71
68
66
64
60
65
70
75
80
85
90
95
100
1 2 3 4 5 6 7 8 9 10 11 12
Invest $1000 a month for 1 year
Units Purchased: 953
Total Cost: $12,000
Market Value: $14,771.50
$ Growth: $2,771.50
% Growth: 23%

3. Example Two:
Averaging in a Down and then Up Market
Unit Price
$6.00
$7.00
$8.00
$9.00
$10.00
1 2 3 4 5 6 7 8 9 10 11 12
Units Purchased
100
105
111
117
125
133
142
133
125
117
111
105
95
105
115
125
135
145
1 2 3 4 5 6 7 8 9 10 11 12
Invest $1000 a month for 1 year
Units Purchased: 1,424
Total Cost: $12,000
Market Value: $13,528
$ Growth: $1,528
% Growth: 13%
(despite the final purchase price being lower than the original purchase price)

4. Example Three:
Averaging in an Fluctuating Market
Unit Price
$9.00
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
$16.00
1 2 3 4 5 6 7 8 9 10 11 12
Units Purchased
100
105
90
95
83
86
76
80
71
74
66
64
60
65
70
75
80
85
90
95
100
105
1 2 3 4 5 6 7 8 9 10 11 12
Invest $1000 a month for 1 year
Units Purchased: 990
Total Cost: $12,000
Market Value: $15,435.50
$ Growth: $3,345.00
% Growth: 28%