THOSE considering a new way to minimise risks in a volatile market may want to consider an old strategy: dollar cost averaging. The strategy is simple. A small sum of money is invested each month into an investment vehicle such as a stock or a unit trust. If the stock is expected to rise in the long term but move up and down along the way, the investor need not worry about having entered the market at a high point or a low. Its a long term investment strategy designed to outrun the normal five-to seven-year stock market cycle. To anyone who has a life policy or a retirement scheme the strategy will sound familiar. Life policies and pension plans are renowned for practising the averaging art. But not without cost. Most life insurance policies and retirement or pension plans have both management fees and heavy up-front charges as well. The result is that returns can be heavily diluted. One way to avoid many of the extra charges tagged on to investment-orientated life insurance or retirement plans is to cut out a middle person. Some of the fund managers have devised schemes based around this strategy. Thornton Management is one. They ask a minimum contribution of $1,000 each month, as does Jardine Fleming. The structure of the plan is simple. Jardine Fleming, for example, will ask the equivalent of $1,000 a month and then tag on the requisite cost of a unit trust. This is usually the normal bid offer spread, or the difference between the buying and sellingcharge of the unit. Plans such as Jardine Fleming's Unit Trust Savings Plan have a number of benefits compared to the investment-orientated life insurance or pension plans. Investors are rewarded for long-term contributions with a two per cent bonus issue of units after six months of payment. Unlike many life policies, there also is no lock-in period with Jardine Fleming's plan. ''We have no penalties for withdrawal,'' said Mr Richard Mosley of Jardine Fleming Unit Trust. For the small investor, the policies also are considered more attractive than investing in a single unit trust because the sums required are smaller. Often a single unit trust will ask as much as US$1,000 (about HK$7,730) to US$2,500. Employing the dollar cost averaging scheme on this basis would prove too costly for many small investors. But even HK$1,000 a month may prove too much for the small investor, which leads some small investors back to the policies offered by insurers where minimum monthly contributions can be as low as $100 a month. So why don't fund managers set lower minimums? Fund managers claim they cannot offer the same policies at such a low minimum because the return would not be worth their while. Even at $1,000, the fund managers need a decent-sized pool. Mr Samuel Cheng, Investment Adviser at Thornton Management (Asia), said: ''If [fund managers] can contribute 1,000 or 10,000 investors, it makes it worth their while.'' Other countries offer lower minimums. According to Mr David Chapman, senior portfolio manager at Matheson PFC: ''In Britain, there are a lot more savings plans for less.'' However, he pointed out: ''It's a much bigger unit trust industry in England.'' Dollar cost averaging does not apply well to stocks either. Because the sums are so small, brokers are reluctant to provide the service. ''Not enough money involved,'' said Mr Chapman. Which leads the investor back to the unit trust. But, despite the $1,000 minimum, interest seems to be on the increase, according to Mr Cheng. ''It has become more popular now. Right now it's getting more and more popular among investors,'' he said.