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Financial Planning / Tax Strategies


Subject:  Re: Investment/Tax Strategy Date:  5/28/1997  11:50 AM
Author:  TMFTaxes Number:  32 of 127637

On Wed, 28 May 97 02:11:00 -0600, MontanaFool wrote:

On Tue, 27 May 97 12:47:15 -0600, TMFTaxes wrote:

<<On Fri, 23 May 97 17:12:24 -0600, ORWAHOO wrote:


I plan on investing over a period of time (dollar cost averaging). I'll immediately put 20% into BTD stocks and perhaps short 10-20%. Then, every month or two, I'll buy a block of stock worth about $7,000. Over a 12-24 month period, I plan on eventually fully investing him in stocks.


TMF Taxes,

It may not be a tax question but why would anyone want to do this in the first place instead of immediately becomming fulling invested in stocks with all available funds. For me, 'dollar cost averaging' is something one does with future income over many years. What do I fail to understand here? Thanks.

Fooling in the Flathead

Tom Kuffel,


Good point. As another poster pointed out, unless these shares are to be purchased through a DRIP plan, the commissions would be greater when buying over a period of time rather than being fully invested. And you are right...dollar cost averaging is something usually done with future income.

I suppose that there could be a wonderful reason to dollar cost rather than immediately become fully invested, but I can't think of what it would be right now. Perhaps the original poster could provide some insight as to the reasoning.

TMF Taxes
Roy Lewis
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