12:28 Jan 13, 2003 |
English language (monolingual) [PRO] Bus/Financial / Fund report | |||||||
---|---|---|---|---|---|---|---|
|
| ||||||
| Selected response from: Ralf Lemster Germany Local time: 16:28 | ||||||
Grading comment
|
SUMMARY OF ALL EXPLANATIONS PROVIDED | ||||
---|---|---|---|---|
5 +3 | to reduce the average price for a position |
| ||
4 +3 | see expl. |
|
see expl. Explanation: HOW DOLLAR-COST AVERAGING WORKS The object is to invest a set amount of money at regular intervals so the average cost of shares tends to even out the market's peaks and troughs. Your dollars purchase fewer shares when the market is up, but they buy more when it's down. While you may not achieve the positive results of buying at the market's low point and selling at its high point, neither will you suffer the consequences of doing the opposite. On average, in a generally rising market, you have the opportunity to accumulate wealth over time in a systematic, organized way. position The amount of a security either owned (a long position) or owed (a short position) by an investor or dealer. Therefore, (in their oppinion)shares should be now bought at a lower price, before the market starts to go up. |
| |