Market Scenario Examples

Present the four common market scenario types using a simplified lump-sum vs. periodic investment example

Let's have a look at the difference between a lump-sum and regular periodic investments using a simplified example for each of the common market scenarios. In this hypothetical example, we will chart and compare a single 10,000 lump-sum investment and five periodic investments of 2,000 over the course of 5 periods. The results on the right are taken at the end of the 5 periods.

This is a simplified hypothetical example for educational purposes only. No allowance has been made for taxes or fees.

Average Unit Price = Total Investment / Total Units Held

Total Units Held = Sum of all units purchased at each interval.

Ending Value =  Total Units Held * Ending Unit Price

Net Gain/Loss = Ending Value - Total Investment