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| Helping You Ease Back into the Market |
| source: Franklin Templeton Investments |
 Most people are quick to agree that volatile markets may present buying opportunities
for investors with a long-term investment horizon. But having the discipline to make
purchases during a volatile market can be difficult. One can't help wondering, "Is
this really the right time to buy?"
Rather than agonizing over the answer, you may want to consider dollar-cost averaging,
an investment strategy that allows you to ease into the market.
Simply put, dollar-cost averaging invests a fixed amount of money at regular intervals
in an investment such as a mutual fund. By buying at fixed intervals, this strategy
ensures that you buy more shares when prices are low and fewer shares when prices
are high, helping smooth out some of the ups and downs experienced during volatile
markets. Please remember, no investment strategy including dollar-cost averaging
can guarantee a profit or protect against a loss in a declining market.
Let's say, for example, that you invest $1,200 at a rate of $100 every month for 12 months.
Consistent, monthly investments may lower your average cost per share and increase your total number of accumulated shares.
HYPOTHETICAL MONTHLY PURCHASE PRICE1
HYPOTHETICAL ACCUMULATION OF SHARES2
Figures are for illustrative purposes only and do not reflect the performance of any Franklin Templeton or Mutual Series Fund.
After 12 Months of Dollar-Cost Averaging…
You would have accumulated 189 shares at an average cost of $6.35 per share. If you had invested the entire $1,200
in the first month, you would have purchased 171.43 shares at $7.00 per share.
1. The hypothetical scenario assumes a share price of $7.00 in January, $6.75 in February, $6.00 in March, $6.25 in April, $6.00 in May, $5.75 in June,
$6.00 in July, $6.25 in August, $6.75 in September, $6.25 in October, $7.00 in November, and $6.50 in December for an average share price of $6.38 over
the 12-month period. The cumulative total of share prices is used to compute average share price.
2. The hypothetical scenarios assumes 14.29 shares were bought in January, 14.81 shares were bought in February, 16.67 shares were bought in March,
16.00 shares were bought in April, 16.67 shares were bought in May, 17.39 shares were bought in June, 16.67 shares were bought in July, 16.00 shares
were bought in August, 14.81 shares were bought in September, 16.00 shares were bought in October, 14.29 shares were bought in November and 15.38
shares were bought in December.
3 Keys to Effective Dollar-Cost Averaging
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| Instead of sitting on
the sidelines waiting
for the right time to
invest, start now.
Dollar-cost averaging
works best over longer
periods of time. |
Dollar-cost averaging involves
continuous investments in
securities, regardless of fluctuating
price levels. You should consider
your financial ability to continue
purchasing shares through periods
of low price levels or changing
economic conditions. |
Regular contributions may
help position your portfolio
to participate in the
market recovery, but it's
important to work with
your financial advisor to
keep diversified according
to your investment goals. |
Get Started Today
With dollar-cost averaging, the best time to begin investing is now. By following this strategy over a long
period, you can help smooth out the temporary peaks and valleys associated with short-term volatility.
An essential part of a successful dollar-cost averaging plan is to maintain a regular, disciplined flow of
money into your investment portfolio. Franklin Templeton Investments offers a wide range of funds to help
you gradually re-enter the market and participate in the market recovery.
Starting a plan now can help you avoid what may be the most costly mistake of all – waiting. Furthermore,
you can visit AvivaDirect website now for more savings on Franklin Templeton funds. Offer ends 31 July 2009.
This document is for information only and does not constitute investment advice or a recommendation and was prepared
without regard to the specific objectives, financial situation or needs of any particular person who may receive it. An
investment in a financial product is subject to investment risks, including the possible loss of the principal amount
invested. Past performance is not necessarily a guide to future performance. The value of the shares and the income from
them may fall as well as rise. Investors may wish to seek advice from a financial adviser before making a commitment to
invest. Investors should read the prospectus for details before investing. You may download a copy of the prospectus
here or at www.aviva-direct.com.sg. In the event that the investor chooses not to seek advice from a financial adviser,
he/she should consider whether the financial product is suitable for him/her.
Copyright© 2009 Franklin Templeton Investments. All rights reserved.
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