Regular saving can take the sting out of market falls

Drip-feeding money into markets is a tried and tested method of dealing with the type of volatility currently seen in world equity and bonds markets, says Fidelity International, the leading investment management and services group.

By putting regular, monthly sums into share-based funds, investors can benefit from “pound cost averaging”. It enables savers to take advantage of falls in stock prices through a disciplined process of buying more shares at lower values. Most Fidelity mutual funds will accept monthly contributions from as little as £50.

Richard Wastcoat, UK Managing Director at Fidelity International, said: “When markets fall, understandably investors lose confidence and either stop investing new money or redeem their holdings. However, investors who are concerned about market volatility could consider a regular savings plan. By investing a consistent amount at regular intervals, investors can gradually ‘drip-feed’ into the market regardless of the price on any given day. This strategy is known as pound cost averaging and will help smooth out the effect of market changes on the value of investments.“