The Professor's One-Minute Guide to Stock Management by Slentz Harvey & Swiencinski Hank

Author:Slentz, Harvey & Swiencinski, Hank [Slentz, Harvey]
Language: eng
Format: epub
Publisher: Highpitchedhum Publishing
Published: 2014-06-30T21:00:00+00:00

Based on the most recent decade of data, the buy and hold strategy does not work. The investor loses money.

Dollar Cost Averaging

Dollar Cost Averaging is frequently recommended as a way for investors to buy more shares at lower prices. The strategy is simple: Invest the same amount, no matter what the price per share. As a result, more shares are bought when the price per share is low, and fewer shares when the price per share is high.

The following table illustrates a strategy of buying $1000 in stock each year, at prices that range from $10.00 to $100.00 per share.

Year

Amount Invested

Price per Share

Number of Shares Bought

Cumulative

Shares

Average Cost/share

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