Make Your Money Work Year-Round

By: News Canada

(NC)-For many Canadians, the only time they are prompted to think of their investments is during the winter months, primarily in response to RSP deadlines. However, investing regularly and putting your cash to work year round, reaps many more benefits including growth through compounding, improved cash flow management and the efficiency of dollar cost averaging.

So even if you're at the cottage or out on the boat this summer, the money you contribute to a regular investment plan can be working hard to maximize your RSP investments.

Contributing regularly makes investing easier and puts your money to work sooner. Through a continuous purchase plan, like those available from BMO Mutual Funds, you will be contributing more regularly such as monthly or bi-weekly. This gives you the comfort and convenience of making smaller, regular contributions to your RSP portfolio and it means your retirement account can grow considerably, due to the remarkable impact of compounding.

Ed Legzdins, President and CEO, BMO Mutual Funds suggests that, for many investors, a continuous purchase plan "just makes good sense" and he urges investors to talk with an investment professional to get a better understanding of how these plans work.

"An investment professional can explain the benefits of investing regularly, and demonstrate how this can help you achieve your goals," he said.

"For example, $100 per month invested over an 18-year period can amount to $46,865, assuming an eight per cent effective annual rate of return compounded monthly."

Regular investment plans can also help you manage your monthly cash flow. You will know exactly how much will be withdrawn and on what day of the month. You can also increase or decrease your contributions, at no cost, should the need or opportunity arise.

Contributing on a regular basis also allows you to benefit from what experts call "dollar cost averaging". This means your regular contribution buys more mutual fund units when the price is low, and fewer when the price is high, helping to reduce the average price you pay per unit over the long term.

A visit with an investment professional can help determine if a continuous purchase plan is best suited for your individual portfolio.

BMO Mutual Funds are offered by BMO Investments Inc., a financial services firm and separate entity from Bank of Montreal.

Information provided by Bank of Montreal. For more information visit www.bmo.com.

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