The cost averaging effect is a fundamental principle in investing particularly associated with saving plans/saving schemes/individual investment plans. The cost averaging effect occurs when an investor consistently invests a fixed amount of money into mutual funds, exchange-traded funds (ETFs), or any other asset at regular intervals, regardless of the asset’s price at the time of purchase. The cost averaging effect can play a significant role in smoothing out the impact of market volatility over time. With regard to this, one needs to bear in mind that this effect gets smaller over time since the impact of the individual regular payment