Don: ...Just playing with some of your numbers...
Average increase for the group was 23 percent (1995 high to 1997 high).
That's if one bought 100 shares of each.
Make it $1000 worth of each and you'd have a 40 percent increase,
because for example you'd have more shares of Etec, and fewer shares Lam.
I doubt there's a generalization to make here.
I suspect the latter position is riskier since one holds more shares of
lower priced issues. Consider MSFT vs AAPL, or INTC vs AMD.
For those who prefer a buy-and-hold strategy, I took a look at Dollar-Cost averaging.
Following your lead, I picked on UTEK.
Buying $1000 of Utek on 1st of month Jan 95 thru Dec 97 (total investment of $36,000),
eyeballing the charts, I get an accumulation of about 1440 shares,
now worth $32587 at $22.63/share, for a 9.5 percent loss. (36000-32587)
The same 1440 shares bought at 40 shares per month would have
cost around $39700, giving an 18 percent loss.
Well, I guess no surprises there. And pointing out the obvious,
if you just bought the whole wad on Jan 2, 1995, you'd have a relatively
acceptable 12 percent gain, but a mid-Sept 1995 purchase would be in that
26 percent hole right now.
(Does anybody really dollar-cost average, other than in their 401k plans?)
Thanks again for the weekly updates on your select 37! |
