"I've long been of two minds when it comes to dollar-cost averaging into individual stocks. I've supposed that it was a sound strategy in general, if you're regularly investing a set amount. But if you're just buying more shares of a stock as it falls, that can be dangerous -- like trying to catch a falling knife. Many times, when stocks fall, it's for a good reason.
Schroeder was addressing the overall market, alluding to a strategy such as dollar-cost averaging into an S&P 500 index fund. I remember Buffett endorsing index funds on various occasions. In his 1996 letter to shareholders, for example, he said, "Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees." In 1993, he said what we have long been saying: "By periodically investing in an index fund ... the know-nothing investor can actually out-perform most investment professionals."
Schroeder is right -- it can be silly to add money to the market when its value is way overblown. But many investors don't know when that is. If they just keep adding through good times and bad, they'll accumulate shares at a wide range of prices, and over time, their value will grow. They won't just be buying near the top, as often happens when bubbles develop..."
This example is why a union works, it takes the ups and downs of the economy and averages them over the long haul, it's not a get rich quick scam like the bubbles the speculators and hedge fund operators created. Each time the contract is opened, the company comes to the table with a $ value that it can afford to spend on employees. We have given up certain benefits to keep others due to increased cost of the benefit wanted, it is all a trade off to match the $ value the company can afford. The shock & awe to the economy as of late was certain to effect the 2 largest investments people make in their lives,ie... homes and autos.
This whole mess was not created at the bottom, it is a crisis of confidence that was started from the top. During times of plenty corruption creeps in, waste abounds and people who never should advance above the mail room on merit, get elected to sit beside uncle Ben on the BOD. These tempting times bring out the greed and self interest in all of us but each only effects the whole, according to the degree of status and power they have to effect capital.
When CEO's & BOD's set themselves up to become the "untouchables", then allowed companies to fail, wiping out investors and share holders, the chain of events was put into motion and all confidence was lost due to this criminal action. If the judiciary system had hung these misfits from the start, the confidence of accountability would have remained, but time and again they have walked away from let-failed companies with their pockets full of investor monies.
I have read where the banks capital reserve has swelled from 2 bill. to almost 500 bil. but the lack of confidence & fear of failed repayment has kept the purse strings drawn tight. When the crooks are booted or have flown the coop and some faith is restored, this money will start to flow out into business and the public, then the inflation will start to run wild with all the excess cash aflow. The pendulum has had a push to the far right, at some point it will swing to the other and we will slush with excess of wheel borrowing money to the store for groceries. So goes the rhyme of history repeating itself. On the big picture, it's liken to a chess game, cause and effect. Some people are really good at chess and playing the game, the rest of us are just along for the ride...
I have to disagree "the union doesn't produce anything". It's given me a safer work place over the years, as of late, the Company has realized the value of safety and it is now it's number one priority in goals to strive for. The union realized the value of good healthy employees to the Company and now the Company promotes a health and wellness program to cut and control cost. I have seen where the union has prompted other non-union Companies to take on the same policies our Company has, if this had not proven to be a benefit to themselves and their employees, I don't think you would have seen this come to be.
I don't know where your distaste for the union comes from and like any organization there are fallacies and abuse but the system as a whole is good for Companies, employees and those around that it touches...jmho
