£-cost averaging is a high return investment strategy that has been around for a long time. The idea is to stagger your purchases so that you end up with a low average entry price. This positive effect can be amplified by investing the same amount each month, so that you buy more shares when prices are lower.
Back in the day savers were encouraged to do this with things like unit trusts, investing regularly to buy units in a fund. It works much better with ETFs where returns are more reliable and dealing costs and fees are much lower.
Below I am going to discuss bolder strategies using £-cost averaging where we are looking for dramatic investment returns.
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