It was in May 2022 that Fion Yu shared how the charts used in the New Light UT/ILP Investment Sales Master Class could be used to explain Dollar Cost Averaging (Regular Premium). The occasion was the delivery of the Master Class to Director Judy Ng’s team (representing Great Eastern Singapore).

The girl of the moment was Fion Yu. What did Fion say ?

Fion said that when customers invest via dollar cost averaging the holding period also matters. New Light research shows that for a 1 yr holding period Singapore equities (STI Index) have a 38% change of delivering negative total returns. If the holding period is 3 years the chance of losses is 26%. This implies that if a customer were to make 12 monthly investments and hold them for one year, 4-5 of the monthly investments could generate losses (12 x 0.38 =4.56). If the holding period is 3 years approximately 3 (12 x 0.26 =3.12) of the monthly investments could generate losses. We can also see that the magnitude of losses for each holding period and this decreases with time. 

The fact that holding period is a very important determinant of success in a dollar cost averaging programme has tremendous implications for both financial advisors and their customers.

For her contribution to the knowledge of financial planning, Fion Yu is awarded the title of Champion of the Master Class.

More than a 1000 financial advisors who have attended the Master Class after her have benefitted from Fion’s sharing and we are grateful to her for this.