By dollar cost averaging (investing essentially the same dollar amount at regular intervals, such as monthly, quarterly, or annually), one tends to buy more shares when the market and one's preferred mutual funds are lower in price, fewer when they are higher, thus reducing the overall cost basis. Especially if investing in tax-deferred accounts, such as Roth or regular IRAs or in 401K Plan accounts, one may simply direct that capital gain and dividend distributions be reinvested upon receipt in the account and leave one's holdings alone for decades at a time, allowing one's investments a chance to develop good compound total returns.

It is useful to analyze a group of mutual funds periodically to see if they still warrant inclusion in one's portfolio, but caution is appropriate before selling out and switching to a new fund. Often, one gets fearful or impatient and sells lower performing mutual funds at just about the wrong time, then investing the redeemed dollars in other funds that have performed quite well, just before they return to more modest levels of performance, losing out in both steps.

At the table below are several mutual funds that have on average fairly low costs but good overall total returns on an annual basis over the past ten years. When keeping money in reserve, it is not appropriate to look at market downturns as a negative for one's investments. Rather, they are chances for us to rush in and buy at bargain prices, just as we might get good, desirable appliances when they are suddenly at steep discounts on the Friday after Thanksgiving. The table's assets have an average expense ratio of 0.69% and an average annual ten-year total return (through 3/31/16) of 10.46%.