Dollar Cost Averaging Again

I have regularly suggested that the foolproof method of investing, especially in the share market, is enhanced by the extreme volatility that characterizes that market.

The system simply relies on the fluctuation of the share price in the overwhelming majority of shares traded daily on a particular share market. The wider the gap between high and low prices the greater the reward.

As an example I calculated the effect of purchasing 1000 shares in BHP over the 5 weeks which ended on September 2nd at the rate of 100 shares each Monday and Thursday. The highest price was $42.19, and the lowest was $38.17. During this period the lowest closing price was $36.74.

By purchasing using this method the average was $39.88 and much more comfortable than trying to snag the cheapest buy of those 5 weeks.