Regular Saving and Investments

We offer advice on all types of regular savings and investments by way of stocks-and-shares ISAs and pensions of all kinds.  Regular saving is probably the single most effective way to build your wealth over the long-term as the mathematical phenomenon of Pound-cost averaging means that share price fluctuations work in your favour.  Shares tending to increase in value over the longer term, your chances of gaining from your investment are increased by regular monthly investment whereby market fluctuations help to maximise your purchasing power.

How Pound-cost averaging works in a rising market

Regular InvestmentShare PriceNo of shares purchased
£100£205
£100£25 4
£100£502
Average share price: £31.67 (£95/3).  Average share price to you: £27.27 (£300/11). Total number of shares bought – 11.

How Pound-cost averaging works in a falling market

Regular Investment Share PriceNo of shares purchased
£100£254
£100£205
£100£1010
Average share price: £18.33 (£55/3). Average share price to you: £15.79 (£300/19). Total number of shares bought – 19.

Pound Cost Averaging requires a disciplined approach along with a commitment to continue contributions during periods of market decline. For those investors willing to stay the course, this strategy has the potential to provide sustained growth over time, regardless of short-term fluctuations.  Lump sum investors wishing to reduce their risk by drip-feeding a lump sum over time can use the same strategy. By spreading an investment, the price paid for shares is averaged out and the possibility of investing everything at the top of the market is avoided.

Berkshire Hathaway’s Warren Buffet famously poses the rhetorical question “What do you want to happen to the stocks you are buying?” to which most people reply “I want them to go up, obviously!” Mr Buffet’s answer is “No, while you’re still buying you want them to go down so you buy more of them. You want them to go up afterward.”  Warren Buffet is one of the most successful investors of all time.