16 - North Shere News - Wednesday, February 9, 2000 Re! T have always encour- aged people to use dol- lar-cost averaging — typically investing a fixed amount every month — because of the psvchological bene- fits. Setting up an automatic DCA program forces you to save. Also, if markets drop, you reduce your losses and can stop your program at any time. But if you have a lump sum to invest, should you still use this approach? If prices tend lower or recover only at the end of the investment period, DCA is the better approach. If prices tend higher, the lump sum approach is almost always more profitable. In March, 1998, I decid- ed to put $10,000 into a mutual fund that focused on Canadian common stocks paying dividends. “For investors who want to protect their capital, aver- aging in allows them to feel more relaxed,” said Brian Phillips, a vice-president at Phillips, Hager & North. That’s me, so I put the $16,000 into a money mar- ket fund and every two months, moved $1,250 into the dividend fund. The dividend fund started out at a unit price of $40.45. a 70% off gym memberships ’ savingumoney.com. sents! 3 BUS ax With dollar cost averag Over the next couple of months it rose to $41. “Perhaps [ should have invested the whole $10,000,” [ thought to tayself. But then the fund started to drop, sinking as low as $32.53 over the next four months. “Thank goodness I didn't invest the lump sum “I thought. “I'd have lost 20% of my money at least on paper.” After that, the fund struggled back up to $38 by last summer, dropped to $35, and by year-end was at $38 again. All the while, the money market fund part of my investment was chugging along at four or five per cent. And when the dividend fund hit its low of $32.53, my $1,250 bought 38 units — all of which benetited from the subsequent 18% price rise. So by last Dec. 31, my $10,000 had grown to INESS 706 even though the Sivdend fund had been below its initial price virtual- ly the whole time. (A former leader among comparable funds, “we had shifted to common from ore- ferred stocks to the banks in particular,” said a spokesman. ) If T'd put the $10,000 directly into the dividend fund in March 1998, with dividends reinvested my Dec. 31 balance would have b.en only $10,092. Still can’t make up your mind which way to go? Hedge your bets: invest half year lump sum at the begin- ning of the period and spread the remaining half over the investment period. Mike Grenby ts a colummuist independent personal He'll answer questions in this col- and financial adviser. umn as space allows bur can- aot reply personally, Contact him at P.O. Box 50029, South Slope R.P.O., Burnaby, B.C. V5 5G3; e-mail . MORTGAGES ; WHEN THE BANKS SAY “NO” 687-2020 INSTAPUND Financtal Services Ltd. VISIT OUR WEBSITE www.instafund.com ‘Adam Korbin Lender Broker fees may apply Customers make his job a pleasure From previous page back or shoulders are sore, he said, all he has to do is come to work and che friendly cus- tomers take the pain away. Commercial Avenues is a monthly feature of the North Shore News’ business section. While it is by no means & com- prehensive guide to any of the areas it focuses on, it seeks ta cap- ture a snapshot of the day-to-day life of businesses selected at ran- dom that call the street home. If vou have a business that is part of a unique or otherwise warth- while block, or know of any, please shave it with us. Wrise io Commercial Avenues, c/o Bob Mackin, North Shore News, 1139 Lonsdale Ave. North Vancouver V7M 2H4. E-mail . TRISHA Sibeon (left) and Rick Slowski are proud of the borderless, homemade cuisine of Tommy’s Restaurant, a faveurite Lynn Valley breakfast and lunch spot.