The Contrarian Investor: Keeping things simple

CONTRARIAN INVESTOR

As a committed fan of keeping investment as simple as humanly possible, I have long subscribed to the dictum that simple pound cost averaging was one of the few free lunches left in modern investment.

But is this received wisdom actually true? Does regular saving open up the investor to excessive charges and leave us vulnerable to market volatility? In simple terms, pound cost averaging describes the practice of buying shares of a stock or fund in equal pound amounts and at regular intervals, rather than scrunching all our savings up into one lump sum and then investing all in one go. Say you have £1,200 in cash to invest. Rather than invest all £1,200 at once, you could invest £100 per month for a year. Let us say the fund in which you are investing sells for £10 a share in the fi...