Establishing an Investment Routine

Making regular contributions to your retirement account is an effective way to build wealth and achieve your retirement goals.

Affording monthly or quarterly contributions can be challenging for many investors. If you make lump-sum annual contributions to your retirement account, you run the risk of buying shares at the wrong time, when prices are higher than average.

A better strategy to building wealth through regular contributions is called dollar-cost averaging. In dollar-cost averaging, you make smaller contributions to your retirement account on a regular basis, either monthly or quarterly, instead of all at one time. The Flex-funds offers a way for investors to use dollar-cost averaging in retirement accounts through our Automatic Account Builder program.

By spreading out your contributions, sometimes you will purchase more shares when prices are low and less shares when prices are high. In the end, your average cost per share will be more even - somewhere in between the highest and lowest price. More importantly, establishing an investment routine will help you become a more disciplined investor.