Stock Market Investments
If there is one term over-used when talking about makinginvestments in the stock market I would think that termwould be: buy low, sell high.
Buy low? Sell high? How low is low and how high is high? Ilike the term buy low, sell dear, much better! But betterstill are the terms buy and hold, and dollar-cost-averaging(buying the same stock at different prices through theyears). For within those two stock market terms, in myopinion, lies the path for successful stock marketinvestments.
For me, if a buy and hold strategy is used, then I want tobe paid for using it, and if a dollar-cost-averagingstrategy is used, I don't want to be charged commissionfees for the future dollar-cost-averaging purchases.
Therefore, in order to be paid for the buy and holdstrategy the companies purchased must pay me every 3months. If a company cannot pay me every 3 months forbuying and holding their stock, then I don't want to buyand hold their stock. The payment is called a dividend, andthe dividend varies with each buy and hold company owned. This buy and hold strategy co-exist withdollar-cost-averaging. The monies paid by the company everyquarter through the buy and hold strategy is used to purchasemore shares of their company. The company does thiscommission-free, and is automatic every quarter through theyears of ownership.
The brokerage houses of today, to compete with mostdividend paying companies, now offer the samecommission-free service when having dividends rolled backinto a company's stock. Only you are going to have to tellthem you want the dividends rolled back into the stock(sometimes you have to tell them twice, since it is not oneof their high priorities; after all, they are in thecommission business).