Market fluctuations make it difficult for investors to determine precisely when to capitalize on an investment opportunity. Setting up an Automatic Savings Plan (ASP) reduces the impact of market fluctuation by taking advantage of dollar-cost averaging.
Dollar-cost averaging involves investing the same amount of money at regular intervals over a certain period of time, regardless of price. Making regular fixed-dollar contributions to an investing solution such as a mutual fund*, for example, you’ll likely invest during times of high and low prices, which helps to average out your returns.