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Author: hvig Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123522  
Subject: Re: Dollar Cost Averaging Rationale Date: 5/30/1997 11:27 PM
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Why bother with so many trades? If you invest half the money now, half in
three months, you'll get better results. Using your numbers, you can get
better results. I'll even do it three times (since the market is random)

Month Shares Bought
1 + 4 351 + 378 = 729
2 + 5 342 + 390 = 732
3 + 6 360 + 372 = 732

These numbers compare well to your 731 shares investing 6 times
with less work and commissions.

With your dollar cost average:

Month Price of SPY Shares Bought
1 85 117
2 87.55 (3% rise) 114
3 83.17 (5% drop) 120
4 79.01 (5% drop) 126
5 76.64 (3% drop) 130
6 80.47 (5% rise) 124
Total shares bought: 731

>> from original post:
Another thing that some posters brought up is that I would incur too much in the way of trading costs. This isn't a valid argument in my case. I'm going to be buying 14 blocks of different stocks in a $100,000 portfolio at about $20-$30 per trade whether I buy them all today, or I buy one block a month for the next 14 months. <<

In that case, why not buy in three sets of 4 or 5 stocks timed three months
apart? Buy the best bets and in two months, you may have found a new stock
has taken the place of one of the ones you originally wanted.

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