INVESTMENTS -
AUTOMATIC INVESTING
"This section
contains additional data that supplements basic information contained in
Your
Money Matters
and should be used
in conjunction with the material contained in Your
Money Matters."
The following table illustrates the benefit of dollar cost averaging.
|
|
Amount Invested |
Price |
Number of Shares Purchased |
|
1st Period |
$4,000 |
$13 3/8 |
300 |
|
2nd Period |
$4,000 |
$8 |
500 |
|
3rd Period |
$4,000 |
$ 6 5/8 |
600 |
|
4th Period |
$4,000 |
$8 |
500 |
|
5th Period |
$4,000 |
$20 |
200 |
|
|
$20,000 |
|
2,100 |
The total amount invested over 5 periods: $20,000
Number of shares purchased: 2,100
Average market price: $11.20
Average cost: $9.52
By the way, your regular contributions to retirement savings plans at
work and to IRAs are a great way to take advantage of dollar cost averaging.
For some suggestions and an illustrate on how you can assemble a diversified portfolio that includes index funds as well as an update on available index funds, click on:
www.jonathanpond.com/investments.indexfunds.htm