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<p>[QUOTE=&quot;bigjpst, post: 938093, member: 21015&quot;]This is more about lump sum vs fixed price investing with mutual funds, but seems it would apply to pms as well. </p><p>&nbsp;</p><p>Here&#039;s an example. Say you decide to invest your $10,000 gift all at once in one fund while your cousin, who also received a $10,000 windfall, invests $2,000 per month in the same fund over the next five months. The fund consistently rises in value during that time. The chart below illustrates what would happen to the two investments. <img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /> Fund Value Increases<img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><b>Month</b><b>Your</b></p><p><b>Investment </b></p><p><b>Your Cousin&#039;s</b></p><p><b>Investment</b><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" />1 5,556 shares </p><p>at $1.80 per share</p><p>&nbsp;</p><p>1 ,111 shares </p><p>at $1.80 per share2 1,099 shares</p><p>at $1.82 per share</p><p>&nbsp;</p><p>3 1,081 shares</p><p>at $1.85 per share</p><p>&nbsp;</p><p>4 1,070 shares</p><p>at $1.87 per share</p><p>&nbsp;</p><p>5 1,053 shares</p><p>at $1.90 per share <img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><b>Total Shares&nbsp; </b>5,556/</p><p>5,414<img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><b>Ending Value</b>$10,556 $10,287 You would end up ahead, because you own more shares at the end of the five-month period. And you own more shares because, due to the consistently rising value of the fund, your cousin couldn&#039;t afford to purchase as many shares as you had purchased originally. But what happens if the value of your fund fluctuates dramatically during those five months? <img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /> Fund Value Fluctuates<img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><b>Month</b><b>Your</b></p><p><b>Investment</b><b>Your Cousin&#039;s Investment</b><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" />15,556 shares at</p><p>$1.80 per share </p><p>&nbsp;</p><p>1,111 shares at $1.80 per share2 1,667 shares at $1.20 per share</p><p>&nbsp;</p><p>3 1,081 shares at $1.85 per share</p><p>&nbsp;</p><p>4 1,481 shares at $1.35 per share</p><p>&nbsp;</p><p>5 1,053 shares at $1.90 per share <img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><b>Total Shares</b>5,556 6,393<img src="https://morningstar.ameritrade.com/im/dot_clear.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /><b>Ending Value</b>$10,556/$12,147 In this case, your cousin ends up in the lead. By investing a fixed-dollar amount in the fund every month, your cousin bought more shares when the price was low, fewer shares when the price was high, and ended up with more shares after five months[/QUOTE]</p><p><br /></p>

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