When it comes to investing your money, there’s no shortage of simple rules that people tell you to follow. One of the best-known is that you should invest a fixed sum every month into a savings plan.
This is known as ‘pound cost averaging’, or sometimes ‘drip-feeding’. But is this rule worth following?
Pound-cost averaging certainly has a lot of practical advantages. In particular, it smooths out the ups and downs of the markets. If you invest a fixed amount each month, your money buys fewer shares when prices are high and more shares when prices are low [...]