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A brief glance at the table reveals the benefits of Rupee Cost Averaging. When the purchase price was high (eg. Rs 10 in Oct 2005), Investor bought fewer units (500) and when the purchase price was low (eg. Rs 6 in Apr 2006), he bought significantly more (833).

The benefits of this strategy are twofold:

The average price Investor paid for the units was Rs 7.52* (the total cost of the units – ie. Rs 65,000 divided by the total number of units purchased - ie. 8,648). This is less than the average market price over the period (Rs 7.77*) even though Ajay was not even trying to “timethe market”.

In Oct. 2000, the value of Investor’s investment is approximately 33% higher than what it originally cost him (Original cost : Rs 65,000 Current value : Rs 10 x 8,648 units = Rs 86,480 ),even though the purchase price in Oct. 2006 was the same as it was in October 2005 (i.e. Rs.10/unit)

By investing regularly, investor bought units as the price was falling and was able to benefit from price appreciation as the market recovered. So Investor has avoided the stress of timing the market but has still

done very well on his investment.

The key – Rupee Cost Averaging which, in simple terms, just means investing regularly, and investing through a Systematic Investment Plans.

Regular date	Investment	Purchase price/units	No. of units Received.
October 2005	Rs.5000	10	500
November 2005	Rs.5000	9	556
December 2005	Rs.5000	9	556
January 2006	Rs.5000	8	625
February 2006	Rs.5000	7	714
March 2006	Rs.5000	7	714
April 2006	Rs.5000	6	833
May 2006	Rs.5000	6	833
June 2006	Rs.5000	6	833
July 2006	Rs.5000	7	714
August 2006	Rs.5000	7	714
September 2006	Rs.5000	9	556
October 2006	Rs.5000	10	500
TOTAL:	Rs.65000	6	468