Posts Tagged ‘mapleridge’

Dollar cost averaging

Dollar cost averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts. Many successful investors already practice without realizing it. If you participate in a regular savings plan, you are already using this tool. Many others could save themselves alot of time, effort and money by beginning such a plan.

 Dollar cost averaging can lower an investor’s cost of investment and reduce his risk of investing at the top of a market cycle.

The beauty of dollar cost averaging is that you buy more shares when prices are low and fewer shares when prices are higher. The result is an average cost that is better than trying to time the market with your investments.

What is Dollar Cost Averaging

Instead of investing all his money at one go, the investor gradually builds up a position by purchasing smaller amounts over a period of time. This spreads the average cost over the period, therefore providing a buffer against market volatility.

In order to begin a dollar cost averaging plan, you must do three things:

  1. Decide exactly how much money you can invest each month. To be effective, you should have sufficient funds to continue investing through the market cycle.
  2. Select an investment (index funds are particularly appropriate) that you want to hold for the long term, preferably five to ten years or longer.
  3. At regular intervals, weekly, monthly or quarterly, invest that money into the security chosen.

An example of a Dollar Cost Averaging Plan

Here’s how it works. The principle is simple: Invest a fixed amount of money in the market at regular intervals, such as every month, regardless of whether the market is up or down.

Let’s assume you have $12,000 and you want to invest in a stock. You have two options: you can invest the money as a lump sum now, walk away and forget about it, or you can set up a dollar cost averaging plan and ease your way into the stock.

You opt for the latter and decide to invest $1,000 each month for one year. Assume further that the stock started at $10 per unit and reaches $16 per unit a year later.

Had you invested your $12,000 at the beginning, you would have purchased 1,200 shares at $10 each. When the stock closed for the year in December at $16, your holdings would only be worth $19,200!

Had you dollar cost averaged into the stock over the year, however, you would own 1,643 shares as shown in Table 1; at the closing price, this gives your holdings a market value of $26,228.

 

Why Dollar Cost Averaging Works

The system works because it takes the emotion and temptation to time the market out of the process. You establish an amount that is comfortable for you to invest and let the market work for you. The system takes the decision-making elements of how much to invest and when to invest out of your hands. Dollar cost averaging solves this problem by eliminating the need to predict an entry point.

Chart 1 shows what happens when you invest $1,000 per month for twelve months in an investment that fluctuates in price. The average market price per unit is $8.08. Look at Table 1, your average cost per unit = $12,000/1,643 which is approximately $7.30. Thus, the example shows that you don’t have to guess when to purchase shares to get a better price.

Will dollar cost averaging guarantee you a profit? No system can do that. However, if you buy quality investments and continue dollar cost averaging over a long period, you will have a much better chance of success than trying to get in and out of the market at the right times.

Buy Low, Sell High

For long-term investors, dollar cost averaging is a powerful tool that takes much of the emotion out of investing and lets the market work for you. One of the major problems facing individual and professional investors alike is determining when to buy a particular stock or, in other words, how to find the bottom of a price swing. The problem is that no one is consistently correct in calling this point on individual stocks and certainly not on the whole market. If you miss this point and the stock begins to move up, you have lost some of the potential gain by not buying at the right point. Very few people buy at the bottom. Those who do, typically happen to have been averaging all the way down.

Market timing is a dangerous game, especially when practiced by beginners, who typically tend to over expose themselves to the market. Market timing is an attempt to predict future price movements through use of various fundamental and technical analysis tools. The real benefit of knowing what is going to happen is that your return from buying a stock before it takes off is better than if you had bought the stock on its way up.

Market timers are the ultimate “buy low and sell high” traders. Day traders, who move in and out of positions in minutes or hours, are the extreme market timers. They look for small profits by the dozens each day by capitalizing on swings in a stock’s price.Most market timers operate on a longer time-line, but may move in and out of a stock quickly if they perceive an opportunity.

There is some controversy about market timing. Many investors believe that over time you cannot successfully predict market movements. Market timing becomes more of a gamble in their opinion than a legitimate investing strategy.
Market Timers and the Next Big Thing

Some investors argue that it is possible to spot situations where the market has over or under valued a stock. They use a variety of tools to help them predict when a stock is ready to break out of a trading range. Usually, the market proves them wrong. Stock prices do not always move for the most logical or easily predictable of reasons.

An unexpected event can send a stock’s price up or down and you cannot predict those movements with charts. The Internet stock bull market of the late 1990s was a good example of what happens when investors in the excitement of the moment, consciously or not, overpay for their investments. Those who bought then are not likely to have made much money.

Everyone has a hot tip about the next “big thing” and investors are always jumping on stocks as they shoot up. Unfortunately, most of these collapse just as quickly as many investors typically hold on way too long. The disastrous result is usually the exact opposite of what they were hoping for. In the end, it is usually a case of “buying high and selling low”. For most investors, the safer path is sticking to investing in solid, well-researched companies that fit their requirements for growth, earnings, income, and so on.

In conclusion, dollar cost averaging takes the emotion out of decision-making and is a useful tool for the individual investor who wants to buy and hold a stock for the long term. Over time, it will usually result in a better entry price than timing when to buy.

If you look for undervalued stocks, you may find one that is poised for moving up sharply given the right circumstances. This is as close to market timing as most investors should get.

Buy a Car Based on the Monthly Payment Cost

Owak / Kulla / Corbis

“It’s dangerous to think about a big purchase, like a house or a car, in monthly terms,” says Jim Wang, a blogger at Bargaineering.com. “It doesn’t illustrate how much of your total wealth has to be surrendered in order to own that house or car.”

“It’s also easier to swallow $200 a month instead of a five-figure number, so salespeople are trained to go after the monthly number,” he says. Whenever a salesperson is giving you financial advice, he says, step back and evaluate whose best interest they have at heart, yours or theirs. Always do the math on what the purchase will cost you in the long run.

“I’d say focusing on the monthly price of anything, and ignoring all else, is terrible advice,” Wang says. “While it’s important to look at that number for the purposes of budgeting, you always want to know how much you’d be paying in total.”

MORE: Drivers Upgrading to New Cars at Slowest Pace in Years

Read more: http://moneyland.time.com/2012/08/23/terrible-financial-advice-top-10-tips-you-shouldnt-follow/#ixzz27bESknpt

A lot of people think that paying any amount owed on a debt acts as a good-faith effort and that creditors are obligated to work with you if you pay a nominal sum of, say, $5. This isn’t true. There’s no such thing as getting an A for effort when it comes to delinquent debt.

“The rationalization behind this theory is that some payment is better than no payment,” says Kimberly Cole, an education outreach coordinator at Novadebt. If you’ve worked out an agreement with a creditor to pay $5 a month, you’re in the clear, but there’s no automatic agreement that kicks in if you just send in whatever you want, she warns. “My clients are often shocked when I advise them that the collection activity will continue without an arrangement.”

Cole says borrowers who get in over their heads need to reach out to the creditor and work out a payment plan both parties agree to — and get it in writing.

Read more: http://moneyland.time.com/2012/08/23/terrible-financial-advice-top-10-tips-you-shouldnt-follow/#ixzz27VPpRUOn

Gas Cubby FREE – Fuel Economy & Service Log

Gas Cubby by AppCubbyI discovered this app and I have been entering my fuel ever since. Very cool to see the cost per mile, see the gas mileage for each fill-up, and even interesting to see the graph of gas prices over time. This does everything my old mileage book did and more.

 

Features:

Tracks gas mileage and vehicle maintenance

Charts: MPG, stats, gas price, gas expenses, service expenses

Online Sync

Customizable service reminders

Supports multiple vehicles

Store vehicle data: VIN, License Plate, etc.

Excel compatible email reports (CSV attachment)

International Units: MPG (US), MPG (Canada), MPG (UK), MPG (Imperial), L/100km, gal/100mi (US), gal/100mi (Imperial), km/L, km/gal (US), km/gal (Imperial), and mi/L

 

via App Cubby • Hand Crafted iPhone Apps – Gas Cubby • Sensible Car Care.

Many throughout Maple Ridge and Pitt Meadows will remember Darlene for her countless years involved with local Girl Guides. Others will remember her as Dee from her 16 years at Home Hardware answering home improvement questions.

In September 2002 Dee was diagnosed with pancreatic cancer. This was almost one year to the day after her own mother passed away from pancreatic cancer after a 20 year long battle.

Each day Dee would travel from her home in Pitt Meadows to the Cancer Centre in Surrey for chemotherapy treatment. This was a grueling ordeal for her considering the cancer had made her highly susceptible to motion sickness and nausea, combined with the already well known effects of chemotherapy. Because of this Dee could not drive herself and had to depend on family, friends, and volunteers. On occasion she would miss treatments, due to either being unable to arrange transportion or unable to bear the discomfort of travel.

The conditions and effects of the treatments combined with the fact the doctors deemed the treatment to be having no positive effects on the cancer, ultimately lead to treatment being discontinued.

As the cancer progressed and her condition worsened, in February of 2003 Dee was admitted to Surrey Memorial Hospital. She was admitted in Surrey due to a lack of space in the palliative care unit at Ridge Meadows Hospital. In mid March 2003 Dee was transferred to Ridge Meadows. The Palliative care unit was not best place for Dee, the ideal place would have been the McKenney Creek Hospice Facility, however this facility did not exist at the time. Despite this Dee did however receive support from Hospice in the form of the wonderful Hospice volunteers who would visit and sit with her for hours.

Dee passed away due to the cancer April 8th 2003.

After her death, because of money raised by the Headshave, Ridge Meadows Hospital acquired the equipment that would have provided Dee her treatment locally instead of in Surrey. More recently, also in part because of money raised by the Headshave, Ridge Meadows Hospital now has the equipment that would have allowed Dee to have received her treatment in her own home.

My name is Allen and I am the “HEADSHAVE for CANCER” organizer and a headshave participant. Dee was my mother.

Health Officials have proposed that warning signs be placed on all alcohol bottles to tip off drinkers about the possible peril of drinking a pint or two of any alcoholic beverage.

1. WARNING: Consumption of alcohol may cause you to wake up with a breath that could knock a buzzard off a wreaking dead animal that is one hundred yards away.

2. WARNING: Consumption of alcohol is a major factor in dancing like an idiot.

3. WARNING: Consumption of alcohol may cause you to tell the same boring story over and over again until your friends want to assault you

4. WARNING: Consumption of alcohol may cause you to thay shings like thish.

5. WARNING: Consumption of alcohol may cause you to tell the boss what you really think of him.

6. WARNING: Consumption of alcohol is the leading cause of inexplicable rug burn on the forehead.

7. WARNING: Consumption of alcohol may create the illusion that you are tougher, handsomer and smarter than some really, really big guy named Psycho Bob.