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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ken W who wrote (22005)	11/13/2000 11:55:26 PM
From: LAWRENCE C.	Read Replies (2) \| Respond to of 29382

Ken, the reasons I buy odd lots are: 1) I'm dollar cost averaging. I'll buy approximately X dollars of a stock. So when a stock is at a lower price I get more shares and when a stock is at a higher price I get fewer shares. Over time that means I get more shares of a company at lower prices in a company that goes up and down (for example CHK, ORCL, RTK, etc.). 2) I can balance my initial purchases to approximately X dollars in each of several stocks which helps with risk management. For ex: $1,000x/$2.5=400x shares $1,000x/$2.0=500x shares $1,000x/$1.5=667x shares Average cost of the 3 purchases is: $3,000/1,567=$1.91. Add in the trading and you can see that this can be a powerful technique in a sideways market. Of course the risk with trading is that the stock runs up and leaves me behind. Of course the risk with holding is that the stock continues down. Lucky Lawrence