An automatic investment plan, or AIP, is a tool that facilitates the implementation of a dollar cost averaging approach in investing. Through this method, an investor can regularly set aside a predetermined amount of money within a defined time period. For instance, one can establish an AIP with their custodian to invest $50 per week into a particular mutual fund. This systematic approach can help mitigate the risk of investing large sums at once and potentially lead to long-term gains.
