Inflation is not only reflected in rising housing and food costs, it eats away at the real value of your investment as well. Thus, you should always look for ways to achieve returns that are equal or greater than inflation, and an indirect way to do that is to shave off your investment costs so you earn more as a result. Even as inflation eases up, we list some tips on how to stretch that investment dollar of yours.

Go for mutual funds with lower or zero sales charge

Invest in mutual funds - these are collective investments that expose you to a myriad of different stocks. Instead of just putting your money into a single stock, you can put the same amount into a mutual fund and be exposed to about 50 stocks, at least. Apart from being a great way to diversify your portfolio, the risks are also significantly lower in mutual funds.

When shopping for funds, ask your fund manager to recommend those with lower or no sales charge. Also known as the "front-end load", this fee is deducted from your investment, and goes to the managers that sell the fund's shares. For example, if you are investing the minimum of $1,000 in a fund with a 5 per cent sales charge, only $950 will be invested in the fund.

Generally, the higher the investment amount, the lower the sales charge. Other than that, funds on Initial Public Offerings (IPOs) - where the units or shares that are issued by the companies to the public for the first time - might have sales charge discounts, so keep an eve out for those. Occasionally, banks might also offer promotional sales charges.

The only thing you should look out for is that investment picks with lower or zero sales charges might mask higher management or administrative fees. So do ask about these when a fund manager offers you a mutual fund with a lower or zero sales charge.

Employ a regular savings plan

You don't need a large amount of money upfront to be a successful investor - just commit to a regular savings plan (RSP) and reap the benefits. An RSP is a disciplined method of investing where a set stun of money is debited from your hank account on a regular basis into an existing investment. By doing this, you are steadily growing your money into a significant sum over a longer term.

This affordable approach makes use of the principle of dollar cost averaging and takes advantage of the inevitability of the rise and fall of share prices. By putting in a fixed amount regularly, your money will buy more units when prices are low and less when prices are high. This means that the average price you pay will he lower than the average market price - thus stretching your investment dollar as long as you can. So by being committed to an RSP, you are potentially reducing your volatility risks and enhancing your long-term returns.

Reinvest your dividends

Always reinvest the dividends from your stock and fund investments, even if you enjoy receiving those mini-dividend cheques now. Usually distributed at regular intervals - monthly, quarterly, semi-annually or annually - dividends can be in the form of bonus shares, bonus units or cash. Reinvesting your stock dividends is an indirect form of RSP.

The other benefit of reinvesting dividends of a mutual fund is that you will not have to pay the sales charge. When you reinvest your quarterly dividend of $500 in the same fund, you can save on the sales charge.

Invest in undervalued stocks

All investors should know that the stock market can be volatile, so don't just go for popular stocks with prices that have already hit the stratosphere.

Undervalued stocks are stocks that are selling at prices below their intrinsic value. The idea is to understand the difference between the market price and value of the stock.

Generally, companies with undervalued stocks have qualities like a good management record, a stable earning history and a healthy financial report. Investors use the price to earning ratio, or the "P/E ratio", to compare the value of stocks. Calculated using a company's market price per share divided by its annual earnings per share, the P/E ratio indicates how much the market is willing to place a stake in the company's earnings. Typically, a low P/E indicates that the market does not have much confidence in the stock. But be aware this stock could be undervalued as it has been overlooked by the rest of the market. Many investors have

I made money by investing in undervalued stocks. Today's investment heartbreak can be tomorrow's star performer. So ask your financial adviser to sniff out 'cheap and good' stocks that will meet your investment goals.

Stretch your daily dollar

And here are some tips for you to stretch your daily dollar so you can put whatever you've saved to better use by investing them accordingly.

Utilise your billing cycle

Call your credit card issuer and ask about your billing cycle. Most people have a 30-day billing cycle that they are either not aware of, or do not utilise. Other than making sure you can pay your credit card bills on time, knowing your billing cycle will allow you to plan for big-ticket purchases. For example, if you're planning to buy an LCD TV, pay for it with your credit card at the beginning of your billing cycle to enjoy a whole month free of interest, and earn points at the same time.

Go for interest-free instalments

No matter how small your purchase, go for an interest-free instalment plan if it is offered by the store. You can put away the extra money over time and channel it to your investments instead.

Shop in countries with a weaker currency

If you're heading to countries like Hong Kong or the Middle East for a business trip, consider doing some of your shopping there. Their currency is weaker than your dollar. So if you're planning to get a big-ticket item, why not buy it in Hong Kong instead?