Investing 102

[GregWeld]

Yesterday I said I was picking away at adding to some positions because I wanted to be buying down a buck or so if I could. That doesn't sound like much does it.... I mean really? Down a buck? Whoo hoo....

Here's the PROPER way to look at this though.


When you're buying 4 or 5 or 10 THOUSAND shares at a time like I do... Down a buck is 4 or 5 or 10 Thousand DOLLARS.

I also always look at PERCENTAGES... so if something is off 2 or 3 PERCENT... and I'm only trying to make 5 percent for the year - well (hopefully) I have a good leg up on that 5% when the market snaps back!


Here's a snap shot of one of the orders I placed yesterday. I placed two separate orders as the day went on -- one for 2000 shares and another one for another 2000 shares as the price fell a little more. I always do LIMIT orders -- so I pick a price I want to pay and when shares are for sale at that price - then the computers buy them. Thus the multiple fill of the orders.



300 $39.679 $11,903.70
Commission: $1.34
$11,905.04
1,700 $39.678 $67,452.60
Commission: $7.61
$67,460.21
159 $39.60 $6,296.40
Commission: $0.71
$6,297.11
1,241 $39.60 $49,143.60
Commission: $5.55
$49,149.15
100 $39.5994 $3,959.94
Commission: $0.45
$3,960.39
100 $39.5994 $3,959.94
Commission: $0.45
$3,960.39
400 $39.599 $15,839.60
Commission: $1.79
$15,841.39



Now --- here's why I'm writing about this today. BUYING ON THE DIPS --- makes you FEEL BETTER. When you buy a little here and there -- and the price a few days or weeks later is MORE than you paid -- YOU FEEL BETTER. Does it make a huge difference 10 years down the road? Probably not really... but for those 10 years... I'll think I was pretty dang smart.

Does this kind of investing make a difference in a portfolio where someone is buying 50 or 100 shares... Not really... BUT YOU'LL FEEL BETTER!!!

Note that I was ADDING to an already established position. I've been asked a zillion times about "should I wait to get in"? The usual answer is no. While you're waiting -- you're losing time -- and will probably wait until just after the "X" date of a dividend payment -- and then will have to go for 3 more months before you get paid a dividend etc. And maybe you missed the 3 day selloff -- and now the shares have not only rebounded but they've jumped 4%. In the long run -- 3 - 5 - 10 - 15 years -- just buy when you have the money ready and are ready to make a pick. TIME is your friend.... not the .50 per share dip you waited for.

If you're pretty sophisticated and are aware of all the little nuances of the market - you know the X date - and on and on - and you're placing orders for 500 shares at a time etc -- okay -- then maybe you can wait a couple weeks or a month or two for a dip like I do.