This tool helps investors determine the average cost of shares purchased over time using a systematic investment strategy. For instance, if an investor contributes a fixed amount monthly to buy a particular stock, regardless of price fluctuations, the tool calculates the average price paid per share. This provides a clear picture of the investment’s performance, independent of short-term market volatility.
Systematic investing strategies offer a disciplined approach to accumulating assets, potentially mitigating the risks of market timing. By investing consistently, investors buy more shares when prices are low and fewer when prices are high, a core principle of value investing. This approach has historically proven effective in navigating volatile market conditions and building long-term wealth. It promotes consistency and removes emotional decision-making from the investment process.