Massachusetts Deferred Compensation SMART Plan Office of State Treasurer and Receiver General EDUCATE What Is Dollar Cost Averaging? SAVE MONEY AND RETIRE TOMORROW Dollar cost averaging is a technique that allows you to regularly contribute money over time to help avoid timing risk (i.e., trying to pick just the right day when prices are low so you can buy more shares).1 • Dollar cost averaging is a simple, systematic investment approach in which you invest a fixed-dollar amount at regular intervals. With your payroll contribution, you are already taking advantage of dollar cost averaging. • With a fixed-dollar amount, you purchase more shares when prices are low, while you purchase fewer shares when prices are high. • Typically, your average cost per share will be lower than your average price per share. How It Works Example: Jennifer wants to invest a total of $2,400 in the market over four months. Month Amount Invested Price per Share Number of Shares Average Price per Share: Sum of Prices $114 January $600 $20 30 Number of Purchases / 4 February $600 $24 25 Average Price per Share $28.50 March $600 $30 20 Average Cost per Share: April $600 $40 15 Total Amount Invested $2,400 Total $2,400 $114 90 Number of Shares / 90 FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration does not represent the performance of any investment options. Average Cost per Share $26.67 How to Use It If you are currently regular paycheck contributions, then you are already taking advantage of this principle. Otherwise, log on to the website at www.mass-smart.com or call (877) 457-1900 to specify your dollar cost average setup date. Choose your dollar cost averaging frequency: • Monthly • Quarterly • Semiannually • Annually Then, determine your target asset allocation mix — the percentage of your account assets to invest in each chosen investment option. For more information, call (877) 457-1900 or go to www.mass-smart.com.2 1 Dollar cost averaging does not ensure a profit and does not protect against loss in declining markets. Investors should consider their financial ability to continue a dollar cost averaging plan during periods of fluctuating price levels. 2 Access to voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. Transfer requests made via the website and/or KeyTalk received on business days prior to close of the New York Stock Exchange (4 p.m. Eastern time or earlier on some holidays or other special circumstances) will be initiated at the close of business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option selected. Core securities, when offered, are offered through GWFS Equities, Inc. and/or other broker dealers. GWFS Equities, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company. The trademarks, logos, service marks and design elements used are owned by their respective owners and are used by permission. ©2015 Great-West Life & Annuity Insurance Company. All rights reserved CB1096DCA (12/2015) PT 250230.