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Systematic Exchange Plan
When you invest the same amount in a fund at regular intervals over time, you potentially buy more shares when the price is lower and less shares when the price is higher. Over time, you may reduce your average cost per share. This strategy, called "dollar cost averaging," helps make market fluctuations work for you and reduces the risk that you'll invest all your money right before a market downturn.
Dollar cost averaging offers its greatest benefit with investments that tend to regularly fluctuate in price, which is why a Systematic Exchange Plan can be especially effective when used in conjunction with aggressive Portfolios. The share price of these Portfolios can vary widely, but, through dollar cost averaging, a Systematic Exchange Plan can make this volatility work for you. You gain access to the stock market's growth potential, and you may reduce your cost of investing over the long term. Our Dollar Cost Averaging Calculator can provide you with examples of how an automatic investment plan can effect your investments in different market conditions.
A program of regular investment cannot assure a profit or protect against a loss in a declining market. Since such a program involves continuous investments regardless of fluctuating share values, investors should consider their financial ability to continue purchases through periods of low price levels.
How the Plan Works
- Start with an investment of at least $5,000 in one of tomorrow's scholar's® Fixed Allocation options.
- Choose a date and a dollar amount. You may invest weekly (up to four times a month), monthly, quarterly, semi-annually, or annually. The minimum investment per period is $100.
- Choose the portfolio you would like to exchange into. This can be an existing account with an identical registration or a brand new account. You may exchange between fixed options, or you may exchange between a fixed option and an age-based option.
- Starting or stopping a Systematic Exchange Plan on an existing account, or making any changes to an existing Plan, will count as one of your an investment change subject to the annual investment change limit.
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