Structured Settlements and Dollar Cost Averaging: A simple plan Utilizing a structured settlement in your post-settlement portfolio can help eliminate the most difficult aspect of investing:  -timing the markets.  With the turbulent markets of recent times, knowing when to "jump into" the market can be an impossible task.  Indeed, you face difficult investment decisions when settling your claim in this environment.  Is now the time to buy?  What if the market goes down right after the settlement is made?  The thought of investing today and facing a potential loss can be unnerving. The strategy of Dollar Cost Averaging can help you overcome some of these fears.  By investing a pre-determined portion of the structured settlement payments into a money market mutual fund or other low-risk, liquid investment, you can automatically move a set amount each month into the mutual fund(s) of your choice.  Dollar Cost Averaging allows you to buy more shares when prices are lower and fewer shares when prices are higher.  Dollar Cost Averaging can help you lower your overall share price and save you from making investment decisions based on emotion rather than strategy. For example, if you invest $500 a month of your structured settlement annuity payment into the mutual fund of your choice, you are able to buy more shares at a lower overall cost.  See chart 1 below for illustration. Chart 1 Date Price Shares purchased without exceeding $500 Value expressed as dollars 3/31/98 59.000 8.48 500.00 6/30/98 53.000 9.43 500.00 9/30/98 65.750 7.61 500.00 12/31/98 64.750 7.72 500.00 3/31/99 61.125 8.18 500.00 6/30/99 62.000 8.07 500.00 9/30/99 52.250 9.57 500.00 12/31/99 43.375 11.53 500.00 3/31/00 34.875 14.34 500.00 6/31/00 35.063 14.26 500.00 9/30/00 44.250 11.30 500.00 12/31/00 61.313 8.16 500.00 118.65 6,000.00 In the three years shown in this example, a total of 118.65 shares were purchased at an average price of $50.57 a share.  As opposed to investing the entire amount on 3/31/98, the cost of investment would be $59.00 per share, purchasing only 101.70 shares. While using Dollar Cost Averaging does not guarantee a profit or protect against loss, it can be an appropriate strategy for clients who are tentative about investing in these volatile markets.  Investors should weigh their ability to sustain investments during periods of market downturns.