Aberdeen Asset to launch MIP

The plan, based on the principle of dollar-cost averaging - is available for all of its funds with a minimum investment of Bt5,000, Chaikaseam Vadhanasiripong, head of funds distribution, said yesterday.

Dollar-cost averaging is the practice of investing or saving money at specific times and the same amount regardless of market conditions.

Users of the new service can pay for their mutual fund purchases through accounts at Bangkok Bank, Kasikornbank, Siam Commercial Bank or Bank of Ayudhya.

Due to the highly volatile nature of the equity market, dollarcost averaging can help customers invest efficiently, he said.

The frequent mistake of investors is buying stocks when prices rise to a significant level while not understanding the companies' fundamentals.

Besides, investment in initial public offering stocks has gained popularity among investors rather than buying stocks in the market, he added.

From Aberdeen's study, investors always keep themselves at bay to digest the situation when the stock market is in a tailspin and start trading again when the stock market rebounds to a certain level, he said.

"We found that investors who use lump sums to invest in the stock market (Wall Street) nine months after the market crashed, they bought stocks at higher prices than those who buy stocks based on the monthly investment plan," he said.

The study also found 11 bear stock market cycles since 1927.

The average returns for nine months before the stock market hit bottom was 27 per cent and for nine months after the stock market reached the trough was 36 per cent.

"Initially, we will focus on educating investors and our sales agents. We are bullish on Asian and emerging market stocks' direction next year, so we're launching the monthly investment plan and we believe that investment will be maximised."