Benefiting from Market Corrections

Investors have seen significant volatility in the equity markets over the last few weeks as they worry over the Euro-zone debt issue and slowing global economic growth along with the downgrade of USA’s credit rating.

Has the equity market really lost its value?

We are currently seeing a huge dislocation of price and value which suggests a highly oversold stock market, and this presents an attractive investment opportunity for investors.

Also, in light of the ongoing market volatility and general weakness in stock markets, investors could consider implementing the dollar cost averaging strategy - for the same fixed amount that you invest regularly, more units are bought when prices are low, and fewer when prices are high.

We have attached 2 articles here: "Value, Prices and Volatility" and "Benefiting from Price and Value Dislocation" to keep you updated.

http://www.samfp.com/Value_Prices_and_Volatility.pdf

http://www.samfp.com/Benefitting_from_Price_and_Value_Dislocation.pdf

Dollar Cost Averaging Versus Lump sum investing : what wins?

Dollar cost averaging (DCA) is a fundamental investment strategy.  It is implemented by a regular savings plan (RSP) which makes it easy to allocate a fixed amount of money every month to a diversified portfolio.

Understandably, the benefits of DCA have been extolled by experts and financial institutions alike. After all, what's not to like about disciplined investing, without the destructive effects of our emotions, where we get to take advantage of the inevitable short term market price volatility - buy more units of blue chips when the markets swing downwards and yet are protected because we buy fewer units during price spikes.