Schemes encourage putting some away for 'a rainy day'

REGULAR savings plans are an ideal way of accumulating wealth, regardless of prevailing conditions, according to Michael Yuen, head of Asian institutional marketing for Jardine Fleming Investment Management (JF).

'The regular investment habit - the savings and investment approach - should be implemented whether market conditions are good or depressed, like they are at the moment,' Mr Yuen said.

He said some investors might end up buying a stock at its peak of, say $25, when with the benefit of a regular savings plan they would have entered at a far lower average price per share.

As stock prices rise, a protective mechanism of savings plans comes into play as the regular instalment buys less exposure to high-priced stocks.

'Regular savings plan investors would not have invested too much at the peak of the market. Putting a regular amount of disposable income into investment is always the right approach,' Mr Yuen said.

JF offers investors seeking a regular savings plan its MasterSaver, a monthly plan based on direct debit from the bank.