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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures

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To: jitkaz who wrote (4709)1/4/2005 8:58:11 PM
From: Casaubon  Read Replies (1) of 12411
 
Jitka,

Since you are prone to long term investment strategies, why not try dollar cost averaging many purchases, instead of lump sum purchases. You will pay slightly more in commission fees but, trust me, you will lose much less to the trade.

Here's a simple way to build the position: Designate a dollar amount which you want to invest. For arguments sake, let's say $24,000. Then, each month purchase $2,000 worth of stock. This will result in 12 commission fees (approximately $100 with a discount broker!). Make each of your purchases on a day when the stock is trading down to enhance your returns. Also, concentrate your purchases to seasonally weak periods (such as the summer doldrums), to further enhance your returns. You will find that your investments spend less time "out of the money" or "in the red".

Good Luck!
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