Gabriel Dzsurdzsa "Founder of TheGreatWallofWealth"

Gabriel Dzsurdzsa "Founder of TheGreatWallofWealth"

Wednesday, May 9, 2007

Dollar cost averaging! and Mutual Funds!

What is dollar cost averaging?

Well let's start off with an example:

Let's say that you start ivesting 100$/month in
mutual funds (professionally managed funds). You
buy 10 shares at 10$ each this month. Next month
price of shares goes down to 5$/share so you buy
20 shares. Next month price goes up to 7.50$/month
so you end up buying 13.33 shares. At the end of
the 3rd month you invested 300$ in 43.3 shares
now valued at 7.50$/share. True that the price
of shares has gone down from 10$ to 5$ and then
to 7.50$ but now you have 43.3 shares which if
you sell now will generate 43.3x7.50$=324.75$
Guess what even if the price of shares has gone
down you still made a profit due to "Dollar
cost averaging". NOTE: This does not include
interest on the mutual fund investment.

Monday, May 7, 2007

THE CRUSADE!

Update: Finally the first step to freedom - self-employed. Proud to say it too! Next step: Business owner! Just starting to understand the brokerage system! uhmmm

Books I'm currently reading! Honestly!