Voluntary Accumulation Plan
An investment method where a retail investor periodically invests (at their discretion) relatively small amounts of funds into a mutual fund, building a comparatively large position over an extended period.
Investopedia Commentary
By investing savings into a mutual fund gradually over time with a voluntary accumulation plan, an investor is able to build a large investment at their own pace, since their contributions are voluntary (although common practice is to invest a fixed amount at specified intervals). By spreading their contributions over a period of time, investors reap the benefits of dollar-cost averaging, as their fixed dollar amount contributions will buy more shares of a mutual fund when its price is low than when it is high.
Related Links
Mutual Fund Basics Tutorial
DCA: It Gets You in at the Bottom
Dollar-Cost Averaging Pays
See also: Accumulation, Automatic Investment Plan, Dollar-Cost Averaging - DCA, Mutual Fund, Retail Investor, Savings
voluntary accumulation plan