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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (1083)	12/30/1998 12:03:00 AM
From: Bonnie Bear	Read Replies (2) \| Respond to of 1722

Jurgis: a nice way to dollar-cost-average is using a closed-end fund that spits out quarterly 8-10% dividends. The assumption is made that on average, the stock market returns about 8-10% a year, so the fund will give a return of capital when the market is down, and a payout when the fund is up. several funds do this: I think these all do: amo, gam, gab, blu, rvt, and most of the convertible funds gcv, ecf, bcv. The other way to do it is in an income fund that mixes bonds (or preferred) and common stock and spits out a monthly 8% dividend that can be reinvested. I have been doing this for the past year on Russell 2000 stuff and the DCA effect worked very well, vastly better than a buy-and-hold. This works best with just a few thousand dollars as seed money and a very long time horizon, preferably in an IRA. The effect is fine..because you're buying incremental chunks of the thing that's producing the 8% dividend.