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Today's Tip: Why You Should Dollar-Cost Average

03/26/01 - 09:45 AM EST

Catherine Valenti

Dollar cost average in...and out...of stocks. Dollar cost averaging, or spreading out your investment in a particular stock over a period of time, is probably the most reliable way to ensure not getting into a position when the stock's price is too high. Conversely, getting out of a position a little at a time safeguards you against selling out when a stock's price is too low. Of course, if a stock is a disaster and you just want out, by all means cut your losses and move. But if you're making a gradual shift in your portfolio, dollar cost averaging might be the best way to go.


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