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Make Market Uncertainty Work for You

Recent ups and downs in the stock market have probably left you feeling on edge. But don’t let that stop you from investing in the Con Edison Thrift Savings Plan. When you invest in the plan, you automatically take advantage of a proven investment strategy known as dollar-cost averaging.

Dollar-cost averaging simply means putting the same amount of money to work on a regular basis. The idea is that you’ll buy shares of investments at a variety of prices – some high, some low. Because the amount you invest remains the same, you’ll find that you’re buying more shares of an investment when the price is low and fewer when the price is high.

Of course, dollar-cost averaging does not ensure you a profit or protect you against a loss, particularly if you decide to change your investment strategy at the bottom of a market cycle. It’s important to continue to dollar-cost average through changing market cycles.

The following chart shows the difference between cost and price that dollar-cost averaging provides in typical market situations. You’ll see that the average cost per share – what it would cost you – is lower than the average price in the marketplace. You’re buying fewer shares at market highs, which is really the bottom-line benefit of dollar-cost averaging.

Market Goes Up
Regular InvestmentShare PriceShares Purchased
$400$580
$400$850
$400$1040
$400$1040
$400$1625
$2,000 (Total)$49235
Average share cost: $8.51 ($2,000 ÷ 235)
Average share price: $9.80 ($49 ÷ 5)
Final value: $3,760 ($16 ending share price x 235 shares)

Market Goes Down
Regular InvestmentShare PriceShares Purchased
$400$1625
$400$1040
$400$850
$400$850
$400$580
$2,000(Total)$47245
Average share cost: $8.16 ($2,000 ÷ 245)
Average share price: $9.40 ($47 ÷ 5)
Final value: $1,225.00 ($5 ending share price x 245 shares)

Market Goes Up and Down
Regular InvestmentShare PriceShares Purchased
$400$1040
$400$850
$400$580
$400$850
$400$1040
$2,000(Total) $41260
Average share cost: $7.69 ($2,000 ÷ 260)
Average share price: $8.20 ($41 ÷ 5)
Final value: $2,600.00 ($10 ending share price x 260 shares)


When is the market high? When is it low? When is the best time to invest?
The only certainty in the stock and bond markets is that prices will move up and down. But no one can predict when, how fast, and how much prices will decline – or bounce back. This uncertainty often makes investing very frustrating. But the good news is that you can actually use the markets’ ups and downs for your benefit. That’s what dollar-cost averaging is all about.

Want to Learn More?
Log on to www.vanguard.com or call a Vanguard® Participant Services associate at 1 (800) 523-1188 Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time.

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