Dollar cost averaging stock investments for long term gain

February 22nd, 2008 by admin

If you are a long term investor, market fluctuations can provide a great opportunity to purchase more stocks to increase your core holdings. In market corrections, strong fundamental stocks get sold down below valuation levels. Savvy investors can add to existing holdings by purchasing additional stock investments. This is a great way to dollar cost average. Over the lifetime of owning the stock your cost of ownership decreases. When the stock appreciates over time you make an additional return on your investment. Many smart investors take advantage of this approach to build a sizeable holding in top quality stocks, many of which pay consistent dividends over time.

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