Hi guys, I’d like to check my understanding of pound cost averaging as a small fry in this big new world of investing.
Onto my example to see if I have understood the theory. I’m only able to pay in £100 a month and I have 10 different company shares I want to buy into, so every month I buy £10 worth of each share.
My question is how to do this if one of the shares goes up the following month (month two) and I can’t afford it with my £10. Do I keep that £10 in my account as cash and wait to see if I can then afford it in month 3 when I have £20 which I can apportion to this share? Is that correctly applying this principle of pound cost averaging?
Thank you everyone!