Investing to achieve your financial goals is important for your future, but let’s face it, not everyone is a natural at making investments. Fortunately, we don't need to be a finance expert to invest successfully. Even with a clear, simple strategy—paired with a long-term mindset—can go a long way.

For those who feel intimidated by the investment process, starting with something straightforward like “peso cost averaging” can be a smart start!

What is peso cost averaging?

Peso cost averaging is an investment strategy where you invest the same amount of money regularly. By investing a fixed amount of money every month, quarter, or year, you can help mitigate the impact of the market's unpredictable behavior.

Let’s explore how peso cost averaging helps manage market volatility through a simple illustration:

Juana starts investing ₱5,000 in Company XYZ, buying shares at ₱200 each. She keeps adding ₱5,000 every month to grow her investment. On her first top-up, the price is still ₱200, so she gets 25 more shares. In the succeeding months, the stock price goes up and down — but Juana keeps investing regularly. This steady approach helps her build more shares over time, especially when prices are low.

Sample scenario: Monthly Top-ups vs. Market Movement 

Note: The above illustration is not exhaustive and does not reflect applicable investment and policy charges. For a complete understanding of your VUL plan, consult with your AIA Life Planner. 

In general, your top-ups can buy you more units when market prices are low and fewer units when prices are high. If Juana continues topping up regularly, she can smooth out market volatility as her average cost per unit balances out over time

What are the benefits of peso cost averaging?

·● Mitigates the impact of market volatility
Over time, investing a fixed amount of money at regular intervals, regardless of the asset’s price, allows you to maximize returns and minimize risks. This strategy helps you average out the cost of your investments, lowering the overall price per unit and minimizing the impact of short-lived price changes in the financial assets where your fund invests. Doing so helps your investment ride out the ups and downs of the market.

● Empowers you to invest confidently without needing to master timing the markets
With peso cost averaging, you can invest consistently without having to monitor market trends, track economic news, or analyze financial data—making your investing journey simple and less stressful regardless of market and economic conditions.

● Helps you learn how to be more disciplined with your money
When you have a regular schedule for investments, you are motivated to make investing a habit. Knowing that you have something to save up for or work towards can fuel you to manage your budget better. Investing regularly can also lead to long-term investing, which can increase your potential for financial growth.

●  Allows you to gain earnings steadily
Slowly but surely, your investments can grow over time. Peso cost averaging is a long-term strategy, helping you see your earnings grow over time with moderate or low risks.

Is peso-cost averaging right for me?

Peso cost averaging is a low-risk, long-term approach where you don’t have to worry about the market’s volatile behavior. If this is the type of investment you’re comfortable with, then peso cost averaging may be for you.

You can opt for VUL insurance, a long-term policy that offers both life protection and potential for wealth accumulation.

AIA Philippines offers VUL plans designed to support a wide range of customer’s financial needs and goals. Back by the expertise of AIA Investments, one of Asia’s leading institutional investors, your funds are strategically managed with utmost care. This partnership ensures that you are on the most efficient path toward achieving financial well-being.

Talk to an AIA Life Planner today to learn more about investing in the long term through VULs.