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Author: TMFJeanie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 942  
Subject: Re: Stock Splits Date: 3/15/2000 2:58 PM
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Hi, just had to add a comment to this discussion of buying before vs. after a split.

Unless your broker charges more for an odd-lot* (less than 100 shares), it really makes no difference whether you buy 50 shares at $80 today, or 100 shares at $40 tomorrow.

The thing to focus on is not number of shares, nor the number of points, but *percentage* of growth.

Let's say you have $4000 to invest. In the scenario above, if you buy 50 shares of an eighty-dollar stock, and it goes up 8 points to $88, you have a gain of 10%.
(50shares*$88=$4400)

On the other hand, if it splits two-for-one at $80, and then goes up 4 pts after the split, your gain is still 10%. (100shares*$44=$4400)

Too often new investors get side-tracked by number of shares and number of points, when the only thing that matters is how much your original investment grows.

*by the way, if your broker does charge more for odd-lots, get a new broker!



Jeanie :)
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