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Dear Fools,
I have $10,000 that I want to invest in Pfizer and Coca Cola. While I definetely subscribe to the strategy of buying and then holding for the long term, I am a bit concerned with the valuations of both these companies. Now I know that a few points up or down won't make much of a difference a few decades from now, but with these two stocks being so highly valued, would it make sense to keep the $10,000 in cash and do a dollar cost averaging thing over the next few months. Or, would I be better off being fully invested right now. Any comments or suggestions would be appreciated.

Peace
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If Dollar Cost Averaging makes you feel better then go for it. I would buy $1000 of each for the next five months. The big thing is that you not wait because in your opinion the valuations are high. Start now either with all or part of the money. People that wait for the bear or the stocks to return to "reasonable" valuations before investing sometimes end up watching stocks continue to rise.

Look at Coke a lower double digit growth company. People have been calling it overvalued for years and years but the PE rarely has gone below 25 which is high from a Earnings valuation standpoint. The whole key is to pick great companies which you have and invest in them for the long haul. The bear may be several hundred percent up from here.(No one knows)

AggieEE
<kledbetter@usa.net>

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If you really like a stock, buy all that you can at one time. Dollar cost averaging really doesn't do much for you except complicate your tracking and eventual sales, if and when you decide to unload some or all of your shares. Besides, there have been studies done that show that you make more in a given stock over time by investing you whole wad at one time rather than dribbling your money into the stock. If it's a good stock and you like it--buy it and get it over with. Then look for the next one. I've followed that approach my whole investing career (I'm 49 and I've been investing since I was 16) and I've not regreted it yet. And I've made a lot of money over those years.
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AggieEE:
>If Dollar Cost Averaging makes you feel better then >go for it. I would buy $1000 of each for the next >five months. The big thing is that you not wait >because in your opinion the valuations are high. >Start now either with all or part of the money. >People that wait for the bear or the stocks to return >to "reasonable" valuations before investing sometimes >end up watching stocks continue to rise.


AggieEE,
I think you have no clue what you are talking about.
(Only kidding, he is a former roommate who taught me everything about investing.)

I have to agree with you, the whole point behind dollar cost averaging is to not deal with day to day fluctuations, or even month to month. If the stock goes down, your money goes farther, if the stock comes up, your stocks are worth more. If the stock goes up and you don't own it, what good does that do you? Don't try to time the market.
I am enrolled in a company run DRiP for the company I work for JBAK (J. Baker). I pay $20 dollars a week. Recently the price has tanked along with the market, but it doesn't bother me because I know the company looks good, and the price will eventually rebound. Meanwhile I am getting more stocks for my money. I am also enrolled in the SGP DRiP, but so far I only own my initial share. I haven't received the info from the company yet on periodic investments.

Gig 'em,
BigUgly
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Since I'm still a small fry, I too have enrolled in SGP drip program.

They permit optional cash investments every 15 days starting the 10th of the month. Have no fees attached to such investments & currently only charge $2.50 plus commissions (usually quite small) to liquidate (altho not really important aspect from the long run.)

Dividends are also reinvested for company paid commission fees (usually a few pennies a share prorata)which you must declare as "income" for tax purposes.

Bottomline...with Mycroft's wonderful analysis proving solid fundamentals & such drip friendly program, I'm excited abt beginning to build equity in SGP for the long term.

Good luck!

Fishlip:)
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