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Sangfroid~ Key for enjoying health and prosperity in the markets.
With XOM, there is the additional benefit that the company pays most of the investment costs:
With dollar cost averaging, growth, dividends, patience and math can work out well over time, particularly as price goes lower, as it often does.
Automatically putting the same amount in on the less popular middle of every month, means more shares are bought at lower prices, with fewer shares bought at higher prices. This mathematical fact can build in and compound total return as long as price does not continue down over the entire accumulation period.
Automatic dollar cost averaging a quality total return company like XOM can work over the long-term, even though academics may point out it is not diversified. Diversification can reduce returns, while concentration in top quality can improve them.
With more shares at lower prices compounding with dividends, automatic dollar cost averaging can work better than buying at the top of 1929 and waiting until 1954 to break even in nominal terms did, not accounting for dividends or inflation.
One careful market study found that even if people had bought at the top of the market in 1929 and each year thereafter, they were ahead of buy and hold with dollar cost averaging in five years.
When it is time for retirement, dividends growing faster than the cost of living, unlike fixed income interest lagging the cost of living, can be spent rather than reinvested.
A saving program like this can be a great gift to a new member of the family to defray lifetime educational, transportation and home down payment costs as well as vacations and retirement.
There are those who still think they really have what it takes to out-pick or out-time the market, despite overwhelming evidence to the contrary.
Garrison Keillor described Lake Wobegone as the town where every child is above average.
http://en.wikipedia.org/wiki/Garrison_Keillor
February 26th, 2010 at 4:25 pm
Rich can you enlighten me on what the Big4 and TopTen is? I see you mentioning it now and then in your posts. I’d be interested, even if you could email it to me.
Regards
February 28th, 2010 at 7:13 pm
Aloha Vahram
Big4 is a Weekly Asset Allocation Report of the net position of the four largest traders in each asset category for $2000 a year with a money back guarantee if ideas do not cover costs in a year.
TopTen is a Seasonal Portfolio of Closely-Held Dividend Discount Values with the same money back guarantee for $1000 a year.
Subscribers repeat and grow because of performance through various market cycles.
Expired copies of back issues to protect current subscribers were sent to your private address.
Regards*Rich