Discuss three reasons why dollar-cost averaging is an important concept to investors
What will be an ideal response?
Answer: If you buy stock over an extended period, it's less likely that all your money will be invested right before a market crash.
Dollar-cost averaging keeps you from trying to "time the market" in an attempt to wait for the lowest possible price before buying. Identifying the lowest price is virtually impossible to do, although admittedly, it is awfully tempting to try.
Most importantly, dollar-cost averaging forces disciplined investing. If you are regularly investing in stocks, the practice becomes part of your budgeting and planning process.
You might also like to view...
Obscure word or phrases that are meant to impress others are generally considered what?
A) Text language B) Passive language C) Humorous language D) Obsolete or pompous language E) Insincere language
A company had interest expense of $7800, income before interest expense and income taxes of $19,200, and net income of $9600. The company's times interest earned ratio equals:
A. 0.81. B. 1.23. C. 2.46. D. 2.00. E. 0.41.
The Wright Bros. Collection is a catalog retailer that sells clothing and collectibles to aviation enthusiasts. Its ________ might be men and women between the ages of 25 and 55 who are risk takers
They belong to organizations such as the American Legion, the VFW, and the National Rifle Association of America. They are either pilots themselves or have close ties to a pilot. They prefer camping to taking a luxury cruise. Annually, they spend $900 on items purchased from nonstore retailers. A) value analysis B) customer potential assessment C) segment profile D) internal market audit E) brand personality
Michael has decided to invest $40,000 in three types of funds. Fund A has projected an annual return of 8 percent, Fund B has projected an annual return of 10 percent, and Fund C has projected an annual return of 9 percent. He has decided to invest no more than 30 percent of the total amount in Fund B and no more than 40 percent of the total amount in Fund C. a. Formulate a linear programming model that can be used to determine the amount of investments Michael should allocate to each type of fund to maximize the total annual return.b. How much should be allocated to each type of fund? What is the total annual return?
What will be an ideal response?