Accumulation Plan
1) A general financial strategy in which an investor attempts to build the value of their portfolio to a desired size.
2) In the context of mutual funds, a formal arrangement in which the investor contributes a specified amount of money to the fund on a periodic basis. By doing so, the investor accumulates a larger and larger investment in the fund through their contributions and the growth of the fund itself.
Investopedia Commentary
1) A prudent accumulation plan is key to building a financial nest egg for retirement. Many investors accumulate investment funds with regular contributions and the reinvestment of dividends and capital gains. Generally, the goal is to keep funds invested and accumulating for as long as possible.
2) An accumulation plan can be useful for investors who wish to build their position in a mutual fund over time, and it also provides the benefits of dollar-cost averaging.
Related Links
Mutual Fund Basics Tutorial
A Statistical View of Mutual Funds
See also: Accumulation Phase, Accumulation Plan, Compounding, Dollar-Cost Averaging - DCA, Mutual Fund, Open-End Fund, Rule of 72