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Comfort Zone Investing: Exploit volatility with constant dollar investing

Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

Times are tough. The stock market is up and down, not like a roller coaster, more like a ride that takes you straight up, then drops. It's exhilarating for some, frightening for most. When stocks move this fast, they present opportunities. One way to take advantage is to use an old investment idea called Constant Dollar Investing. Here's how it works.

You make a commitment to invest the same number of dollars each month. You buy one stock, or a different one, every month. Usually investors buy a fixed number of stocks, adding to each position one at a time. What this does is give an investor an overall lower cost of buying a full position in a stock. Here are the numbers.

Continue reading Comfort Zone Investing: Exploit volatility with constant dollar investing

Symbol Lookup
IndexesChangePrice
DJIA+30.6910,464.40
NASDAQ+6.872,176.05
S&P 500+4.981,110.63

Last updated: November 27, 2009: 07:02 AM

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