Anyway, “pound-cost averaging” is a phrase that refers to investing regular amounts over time, rather than investing all your money in a fund at once. Why would you do this? Imagine if you invest £10,000 tomorrow and the stock drops 20%. At £8,000, it will need to increase 25% (not 20%) to get back to £10,000. By investing at regular intervals over time, you hedge against any drops in the price — and if your fund does drop, you’ll pick up shares at a discount price. In other words, by investing over time, you don’t try to time the market. You use time to your advantage. This is the essence of
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