Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: madmarv Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 244  
Subject: Re: Quarterly Pseudo Driping Bad? Date: 11/8/2001 11:44 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
As you can see, not a great deal of commission cost for both plans, but which will be more beneficial for my overall return? Driping more frequenly, or less?

Statistically, the answer is neither. There is no significant benefit either way in the long term. The 0.7% savings in commissions is more than offset by the variation in average purchase price. George's article missed the point of dollar cost averaging. He didn't figure out the average purchase price would be under the various scenarios. The bottom line is that monthly or quarterly dripping plans will probably end up with an average price within a couple percentage points of each other and there is no guarantee that a greater frequency will mean a lower purchase price.

Here's a post I made a while back on the subject. I should mention that this study used a long purchase period (5 years). Don't expect the results to be the same for shorter periods.

http://boards.fool.com/Message.asp?mid=13258901

Marv
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Invest Better Hub
Take advantage of our newest free service, Invest Better!
New Fool-Branded Credit Card Available!
How does your card compare to ours?
Post of the Day:
iPIG Portfolio

Something Had to Change
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Facebook Fool Fan Club
Be a fan of the Fool over on Facebook!
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Get the Fool Phone App
Save and share content, zero in on sectors, podcasts, and much more!
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement