Regular Investing and Your Average Cost

The math is straightforward, as long as you keep decent books. Keep buying the same product, with no sales, no dividends, and no unit adjustments in between, and your average cost works out as:

average cost per unit = total spent ÷ total units received

"Total spent" means everything that actually left your account, including transaction fees. Log each purchase, date, amount deducted, fees, units credited, and you can rebuild the whole figure from scratch whenever you need it.

For a hypothetical example in Chinese yuan, ignore fees. Spend ¥1,000 at ¥10 a unit and you own 100 units. Spend ¥1,000 at ¥5 a unit and you own 200 units. That's ¥2,000 for 300 units, an average cost of about ¥6.67. Those same 300 units are worth ¥2,100 at ¥7, a hundred yuan of gain, or ¥1,500 at ¥5, five hundred yuan of loss. The average is the pivot: prices above it put you in the black on this position, prices below it put you in the red.

Sell some of a holding and the units and their allocated cost shrink together, under whatever allocation rule you follow. Once dividends, sales, or cash transfers have already happened, working out what the whole account earned becomes a bigger job, all cash in and out on one side, remaining value on the other. That walkthrough lives in fund NAV and personal investment returns.

Say your salary leaves you with roughly ¥1,000 free every month. Investing ¥1,000 right after payday follows the money's natural rhythm, and you're never putting down cash you don't yet have.

Now say you already hold ¥12,000. Spreading it a thousand a month is still an investing decision, but it carries a hidden one: the remaining cash stays uninvested until its scheduled purchase. If you want to compare "put it all in now" against "drip it in," start both versions from the same date and the same balance, then count the uninvested cash and whatever interest it earns at the finish line. The worked example in what regular monthly investing changes compares rising and falling price paths using simplified assumptions.

Write down what's really going on in your life first: payday, the bills that can't move, big payments coming soon, and how much reserve you're happy keeping on hand. Whatever is left after all that is your investable amount, and it should be an amount you could keep paying for years. When your job or your spending changes, come back and adjust the schedule instead of letting it drift.

After each purchase, open your account and check that the units you expected actually landed. Looking back over a period, look at all four numbers, how much you put in, how many units you hold, what they're worth now, and what cash you received along the way. Which products to feed into is a separate question, covered in index rules and fund trading prices, and the full route from paper returns to money you can actually spend is in how investment returns become personal gains.