If you want to invest consistently, even with small sums, an investment plan can be an excellent solution. Most investment plans are built on the idea of periodic investing, which means contributing regularly over time instead of investing a lump sum all at once. This approach helps smooth out market fluctuations and encourages financial discipline.

What Is Periodic Investing

Saving for long-term goals such as retirement or your child’s future often involves making monthly or quarterly transfers to a savings account. With an investment plan, these same payments can instead be directed toward one or more investment funds or a unit-linked life insurance product, aiming for a higher return than a traditional savings account.

Periodic investing means putting in a fixed amount at regular intervals, regardless of whether stock prices are high or low. This strategy helps you average out your purchase price over time and lowers the risk of investing everything when prices are unfavorable.

The longer you stay invested, the more likely you are to benefit from this strategy. A period of ten years or more is usually long enough for market fluctuations to even out. However, keep in mind that there is always some level of risk in financial markets, and there is no guarantee of recovering your entire capital. It is also essential to pay attention to fees, as they can significantly reduce your overall returns.

Regular investment in diversified funds generally offers a positive outcome over the long term, especially when supported by patience and consistency.

How to Create Your Investment Plan

Before you start, your bank or financial advisor must determine your investor profile. This involves assessing your financial situation, goals, and risk tolerance. Your investments should always match your personal and financial circumstances.

Once that is established, you can either select the specific funds that will make up your investment plan or choose one of the many ready-made plans offered by financial institutions. These pre-designed options often cater to different risk levels, making them suitable for beginners or those who prefer simplicity.

Your risk profile should be reviewed regularly. Life circumstances change, and your investment strategy should evolve accordingly. Don’t hesitate to ask your bank or insurance provider to reassess your profile every few years or after major life events.

When setting up your plan, always request complete information about the available investment options, their potential risks, and the terms and conditions. These details are usually provided in product prospectuses and information sheets. Only invest in products you understand and always ensure your portfolio remains diversified. Avoid concentrating all your investments in one place or product type.

How to Compare Investment Plans

There are many different investment plans available, and choosing the right one depends on your goals, budget, and flexibility needs. To make an informed choice, review the following key points.

First, compare the annual management fees. Entry and exit costs are often low or even nonexistent, but ongoing management fees can vary considerably. These charges directly affect your returns over time. Some institutions also charge advisory fees, so be sure to check for those.

Next, consider the cost of maintaining a securities account, which is required to hold and manage your investment products. Some banks offer this service free of charge, while others may charge an annual fee. If you plan to move your investments to another institution later, also check any transfer fees or penalties for early withdrawals.

Look into the minimum contribution amount for periodic payments. Many banks or insurers allow you to start an investment plan with as little as $25 per month, while others may require higher amounts. Choose a contribution level that fits your budget and that you can maintain comfortably over time.

Flexibility is another important factor. The best plans allow you to choose monthly or quarterly payments, pause contributions if necessary, or make additional payments when possible. Since no one can predict how their financial situation will evolve over ten or twenty years, avoid committing to a plan that is too rigid. Review the duration and withdrawal conditions before signing.

Lastly, evaluate the range of investment funds available in your plan. A wider selection of funds gives you a greater opportunity to diversify and tailor your investments to your profile and preferences. Some banks may restrict access to their own funds, while others provide options from multiple providers, allowing for broader diversification and potentially better long-term results.