Invest regularly

Important information - please keep in mind that the value of investments can go down as well as up, so you may get back less than you invest. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

Invest regular amounts to avoid making decisions in the moment that might affect your returns.
 

• Take the emotion out of decisions
• Average out the cost of your investments 

The theory

One of the benefits of investing regularly is that it takes the emotion out of investing and puts your money to work - no matter what the market is doing.  It removes the temptation of trying to time the market. There are pros and cons to this.

If the market falls, investments don't cost as much and you'll get more for your money. When the market rises, the price of investments go up and you get less for your money. Over time the price you pay for your investments will average out. This is also known as pound cost averaging.

How it works in practice

The examples below are based on illustrative scenarios, not real market returns. Investment values can fall as well as rise and so outcomes can be different depending on market conditions. Charges would also apply and reduce any returns.

In each scenario, both investors have £12,000 to invest over the year. The difference is that one regularly invests £1,000 each month, while the other invests it all in one go. 

In a rising market (where investment prices go up and down over the year but end it higher) Dan will do better than Shandia. This is because he invested his whole £12,000 at the beginning of the year, when prices were at their lowest.  Dan makes £3,660 over the year, which is £2,150 more than Shandia.

In a flat market (where investment prices go up and down over the year but end up where they started) Trish does better by regularly investing £1,000 each month. This is because she bought investments at different prices which averaged out at a lower price than Andrew paid (so she gets more investments for her money). As a result, Trish’s investments are worth £1,941 more than Andrew’s by the end of the year.

Important information - please note that these guidance tools are not a personal recommendation in respect of a particular investment. If you need additional help, please speak to an authorised financial adviser. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals.