Best online stock trading – For a clearer picture of exactly what this means, take a look at Table 1, showing results of a hypothetical dollar averaging program using the stock of Bond Stores.

Over the 15-year period beginning in 1944, the stock rose sharply from the twenties to a high of nearly 50 in 1946, dropped slowly in succeeding years, and recovered near the end of the period. Our dollar averaging program assumes purchases of $1,000 worth of stock on the last trading day of each year, at an approximate average of the high and low prices of that day, the last purchase being made in 1958. The first purchase is at 221/4, and the last at 211/8, with purchases in intervening years ranging from a high of 391/2 to a low of 131/8. Thus we see the operation of the plan over a complete market cycle, in which stock is bought above as well as below the initial price, and the last purchase is near the same price as the first. Neither commissions nor dividends are included in the calculations, and investment of the $1,000 in full and fractional shares is assumed. The number of shares purchased ranges from 31.

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