A regular investment plan is a key part of your investment strategy that enables you to invest a set amount of money on a regular basis so that you can build your investment gradually.
One of the best way to buy mutual funds or any savings program is by making automatic purchases every month. Regular investing has three important advantages:
You pay yourself first. Despite your good intentions to put money aside, other expenses always seem to get in the way. But if you have the money automatically withdrawn from your financial institution regularly, it will go to your investments before you have a chance to spend it on anything else
It’s painless. If you have a reasonable amount of money withdrawn from your account regularly, you’ll find you never miss it because you never see it in the first place. And that’s a lot less painful than writing a big cheque for investments once or twice a year .
For Mutual funds, you get the advantage of dollar cost averaging. By investing a fixed amount regularly, you end up buying more units when the price is low and fewer units when the price is high. Over time, this can reduce the aver age cost of your units.