adidas womens trainers uk The Monthly Investment PlanThe Monthly Investment PlanFor a beginner there is another very simple way to beat the stock market cycle. It is called the monthly investment plan, and takes advantage of a simple technique called dollar cost averaging. It's a sort of if-you-can't-beat-'em join-'em setup.The plan was put into effect by the New York Stock Exchange in 1954 to allow beginners and small investors, with limited funds available from a monthly budget, to invest those monthly savings in NYSE stocks through brokers who are members of the exchange. It allows them to buy stock by the dollar's worth, like fuel oil, instead of by the unit.If you open a monthly investment plan account you agree to invest a certain sum each month or. even each quarter. You pick the preset amount but it must be at least $40. With this money your broker has the odd lot broker buy for you as many shares of the stock which you have chosen as that amount of money will cover, including brokerage, which he subtracts from the money you have sent him. The odd lot broker does this immediately after the price of the stock is established the morning after your dealer receives the money. The number of shares is figured to four decimal places. It is the only way I know of that a person can own a fraction of a share on the exchange.How then do you get a certificate for a fractional share to the fourth decimal place? You don't. This fractional share business is all kept on the broker's books, and when your monthly investment plan contract is finally ended, you get a certificate for the number of whole shares you have bought.
In adding up the part shares there will undoubtedly be a fractional share left over, and this will be sold and the proceeds sent you. However, you receive credit for all dividends due the moment you have bought any stock, including fractional shares, and these dividends are credited to your account by your broker and added to your funds for stock purchase the next month just the way interest draws interest in a savings bank account. During the life of the plan this should mean one or two extra shares purchased.This is how it works. You decide to open a monthly investment plan account and buy United Overshoe stock. You decide you can handle $60 a month. United Overshoe starts out selling at $40.Of your first month's $60, after the brokerage fee at 6% is subtracted, $56.616 is left for stock purchase. Furthermore, you pay $40% for United Overshoe instead of $40 because of the odd lot differential which we have already explained. You therefore get 1.4109 shares of United Overshoe. We'll say this was in January. Thus, ignoring dividends, you have:If you stopped the plan after a year you would receive a certificate for nineteen shares of United Overshoe and a check for a little over half a share represented by the .5451 of a share left over.
adidas mens trainers uk You would also receive the amount of the dividends, since these (at 50 cents a quarter) would not have been quite enough to finish out the twentieth share.You have thus bought nineteen shares at an average price just under $37.90 and received a substantial check besides. If you should decide to sell at the price you paid the last month of the plan, $477/8, you would receive $907.25 less sale brokerage against your investment of $720.00. Remember, though, when your price was $47% you paid 848.00 to purchase. But if you sold, the differential would go the other way and you would be selling for $47%, $47.75.The new surcharge which has been added to the NYSE rates calls for an extra half of the regular commission, or $15, whichever is less, to be added to the brokerage fee on small transactions. If you bought without the monthly investment plan, therefore, the number of shares represented by the purchases above would be less by 3%.However, monthly investment plan purchases are, so far, exempt from the surcharge up to $100 each purchase. Above that amount the surcharge is added as it is on any account. Thus you can buy on the monthly investment plan actually cheaper than you could buy in the same small amounts outside it http://www.ukshoea.com.