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Article: PICK YOUR VEHICLE WISELY IN DOLLAR COST AVERAGING.(Business)(Column)
- Article from:
- Seattle Post-Intelligencer
- Article date:
- October 4, 2001
CopyrightCOPYRIGHT 2001 Seattle Post-Intelligencer. All rights reserved. Reproduced with the permission of the Dialog Corporation by Gale Group. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: CHET CURRIERCOLUMNIST
IN TURBULENT MARKETS, the ancient investment strategy known as dollar cost averaging really gets a chance to show what it can do.
Wouldn't you know, turbulent markets also spotlight the weaknesses and limitations of that same strategy. So what better time to take a close look at it?
Dollar cost averaging uses a simple mathematical trick to pursue a money-management objective familiar to all investors - buying low. The secret to it is that equal amounts of money buy more shares of a stock or mutual fund when the price is low than when the price is high.
If you make $1,000 investments in a stock at $4, $8 ...