Additional Risk Reduction with Diversification by Time
Scheduled Purchasing Plans
ShareOwner is the only investment dealer in Canada where investors can build their portfolio with a Scheduled Purchasing Plan.
With a Plan, busy investors can maintain a consistent investing timetable for building their portfolio while enjoying the opportunity to practice dollar-cost averaging.
For example, suppose you now have $3,000 to invest in a retirement portfolio, tax-free savings or other investing account.
Instead of investing the entire $3,000 all at once in a diversified portfolio of 20 stocks, you decide to sample your new portfolio’s future performance using a Scheduled Purchasing Plan.
The Plan you select at ShareOwner might, for example, call for an initial portfolio purchase of $1,000 (e.g. $50 for each stock) and two subsequent $1,000 purchases at four-month intervals. At the same time, you can conveniently schedule matching electronic fund transfers to pay for the purchases.
Following your Plan, ShareOwner automatically purchases the portfolio’s selection of stocks on schedule.
Diversification by Time
In addition to the convenience of scheduled purchasing, time diversification can also be a powerful portfolio management tool.
For example, during the portfolio building process, scheduled purchasing gives you the freedom to limit the risk of disappointing performance by an individual stock or the entire stock market. You simply cancel scheduled purchasing.
As well, with scheduled purchasing, you can enjoy the opportunity to practice dollar-cost averaging to reduce the average price for stocks in the portfolio.
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