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Cost-average effect
Investierenab 13 J.
With regular savings-plan purchases, you buy more units when prices are low and fewer when prices are high. This smooths out your entry price.
The cost-average effect (average cost effect) arises automatically when you regularly invest the same amount – no matter whether prices are currently high or low.
How it works: you invest €100 in an ETF every month.
• Month 1: price €50 → 2 units
• Month 2: price €25 → 4 units (low price = more units!)
• Month 3: price €100 → 1 unit
• Result: 7 units for €300 = average price €42.86
Advantage: you don't have to try to find the "right" time to buy (market timing) – not even professional fund managers manage that reliably. With a savings plan you simply invest regularly and benefit automatically.
Did you know? Historically, it was almost always better to invest immediately than to wait for the “right moment”. Anyone who has invested €100 a month in the MSCI World since 2000 has easily weathered every single crisis.
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