Newspaper article Fraser Coast Chronicle (Hervey Bay, Australia)

Shares Have Greatest Investment Return Potential of All

Newspaper article Fraser Coast Chronicle (Hervey Bay, Australia)

Shares Have Greatest Investment Return Potential of All

Article excerpt

Focus On Finance

with

Noel

Wittaker

THE share market is at a six-year high. If you have money to invest, but are nervous, you could adopt a strategy called "dollar cost averaging", which consists of investing a set sum every month into the same investment.

For it to work, your investment has to move back up when the market does, so don't use it to buy speculative mining shares.

Quality share trusts are the perfect investment for dollar cost averaging because your money is spread over a range of companies and the price of their units tends to fluctuate in line with the stock market.

Let's see how it works in practice. We'll assume you started investing $1000 a month in August 2008 just before the mother of all crashes - and kept it up faithfully despite all the ups and downs of the market.

Provided you reinvested all your dividends, and the performance of your investment matched the All Ordinaries Accumulation Index, you

would now have $101,330 for a total investment of $72,000. …

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