Investors spooked by U.S. Federal Reserve

Image via WikipediaInvestors are fleeing the stock market in favor of bonds, which they perceive to be a safer investment. The announcement by the Federal Reserve that they have developed a new strategy to get the U.S. economy growing seems to be a major contributor to this run for safety.

The Fed announced Wednesday that in hopes of reducing interest rates on long-term loans, it would shuffle $400 billion of its own holdings. In addition, the President of Strategic Energy & Economic Research, Michael Lynch, highlighted that this bleak outlook from the Fed combined with a rare public warning by the chief economist of the European Central Bank is a confirmation that the economy is not improving.

Investors appeared to take this as a sign that the economy was not about to recover anytime soon and that a recession may be closer now than at any point during the current recovery.

This caused oil and metal to dive sharply amid fears that demand for them would fall if the world does go into recession.

In spite of the lower interest rates investors spurned stocks in favor of bonds.

No doubt the polarization of U.S. politics also contributed to the stock market tumble, as it appears the Republicans are bent on bringing down President Obama even if this means a depression for the U.S.


On an unrelated matter, The Hoss sees some irony as during these turbulent times, we have millionaire NBA players and Billionaire owners unable to agree on a contract.There are many unemployed people willing to do any kind of work to feed their families, while these fat cats squabble over how to divide millions of dollars. The rich get richer and the poor, well they starve.

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Investors Flee to Cash

Image by Getty Images via @daylifeAnd there off, no not the thoroughbreds, but the investors running down the track looking for financial security in cash and away from stocks. North American stock markets had one of their worst days in recent history. Even gold was not immune from this stampede away from equities and into cash.  

Volumes were high, for example the NYSE hit 7.5 billion shares, not quite double this year’s average volume of 4.12 billion, so this sell off could not be attributed to low volume. Rather the very real fear of a global financial crisis sparked this panic sell by investors.

It almost seemed as if worried investors were sitting on the back of a bucking bronco and the only way they could see of staying on the horse was to liquidate as quickly as possible. Some banks are actually considering charging customers for holding their cash.


The next few days will be very interesting in deed. Will buyers step in to pick up undervalued stocks? Will Friday’s job numbers spark a buying spree or will they create further turmoil?

Stay tuned and lets see where the finish line is and which investors steer the right course.

Stay on Track,Money Magazine Hoss

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BMO Investments Inc. Announces a Portfolio Manager Change and Service Fee Adjustments

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BMO Investments Inc. (a member of the BMO Financial Group) announced that effective Jan 08, 2010 they are replacing the portfolio manager of BMO Global Equity Class a class of BMO Global Tax Advantage Funds Inc.

London-based Insight Investment Management (Global) Ltd., formerly Rothschild Asset Management Ltd. is the current manager and will be replaced by Aberdeen Asset Management Inc. Aberdeen Asset Management Inc. is an independent investment manager, managing over C$251 billion for individual and institutional clients throughout the world. The regional investment teams are based in the markets or regions in which they invest. They are based in Aberdeen, Scotland. The global management team for the fund is in Edinburgh, and led by Stephen Docherty.

The fund since it was formed in November 2000, is a second-quartile performer over the five- and six-year periods ended Nov. 30. But over the one- and three-year periods, the fund has performed in the fourth quartile.

In addition in their press release BMO Investments Inc. announced that on our about January 1, 2010, BMO Investments Inc., as manager, will increase the maximum service fee under the sales charge option of BMO Guardian Monthly Dividend Fund Ltd. from 0.75% to 1.00%, under the standard deferred charge option from 0.25% to 0.50%, and under the low load deferred charge option from 0.50% to 1.00%. There will be no increase to the maximum service fee under the sales charge option for Classic Units.

Also effective on or about January 1, 2010, BMO Investments Inc., as manager, will increase the maximum service fee under the low load deferred charge option of BMO Guardian Canadian Diversified Monthly Income Fund from 0.50% to 1.00%. There will be no increase to the maximum service fee under the sales charge option or under the standard deferred charge option.

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Money Magazine Hoss

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Meritas Financial Inc. And Qtrade Fund Management to Merge.

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Meritas Financial Inc. and Qtrade Fund Management Inc. have announced a plan to merge.

The merger will result in Meritas Mutual Funds becoming a separate division of QTrade Financial and they will maintain their philosophy of socially responsible investing(SRI). (No investments in tobacco, military or companies harmful to the environment).

It is expected the deal will close at the end of March. The Meritas team will continue to be headed by Gary Hawton and when the deal is finalized he will become the chief investment officer of the Qtrade fund management division.

"For us, it gives us a more national presence. Right now, while our funds are for sale right across Canada, all of our employees are in Ontario," Hawton said.
Hawton will report to Qtrade head Scott Gibner, who will become chief executive officer of Meritas's new parent company.

"Meritas' strong and unwavering commitment to SRI over the last 10 years has been the foundation for their success and, as SRI funds continue to grow in popularity in Canada and globally, we believe this dedication and historical track record will continue to serve Meritas very well into the future," Gibner said in a statement.

Gibner, also said the company wanted to broaden its wealth-management portfolio.

“One of our primary goals will be to build the status of Qtrade’s investment solutions nationally, including a large focus on Meritas industry-leading socially responsible investment funds.”

Together the two companies will have combined assets of more than $4.3 billion from individual and institutional investors.

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Money Magazine Hoss

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Claymore Investments, Inc. Launches New Canadian Bond ETF

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Claymore Investments, Inc., on Nov. 19, 2009 announced the launching of the Claymore Advantaged Canadian Bond ETF (TSX: CAB.TO).

The fund is a fixed income exchange traded fund (ETF) which is designed to provide investors with a low cost, tax-efficient exposure to a diversified Canadian bond portfolio. The plan is for the fund to track the DLUX Capped Bond Index, a high-quality subset of the DEX Universe Bond Index.

In other words, the price and performance of the DEX DLUX Capped Bond Index ("the Index") will determine the return of the fund, net of fees and expenses.

To qualify for the DLUX indexes, securities must have a minimum issue size or amount outstanding of $300 million, credit ratings of A or higher, and annual trade-volume turnover of 25% or higher. The Index tracks Canadian investment grade Government and corporate bonds, with target exposure allocations of 60% and 40%, respectively. The fund will receive exposure to the bond securities underlying the Index through the use of a forward agreement with TD Global Finance.

"Bonds are a very important part of an investment portfolio for income and diversification purposes and CAB is a simple, low cost way to get exposure to bonds on a tax-efficient basis. The fund is structured to provide tax-efficient income, making it an optimal investment for non-registered or taxable accounts and we are excited to be partnering with DEX, the leader in Canadian fixed income indexes, to bring this product to the market" said Som Seif, President and CEO of Claymore.

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Money Magazine Hoss

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Excel Funds Launches BRIC Fund
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Excel Funds Launches BRIC Fund

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On Nov. 3, 2009 Excel Funds, a Mississauga Ontario-based fund company that focuses on investment opportunities in emerging markets launched a new fund named Excel BRIC Fund. The new fund is made up from four existing Excel funds: Excel Latin America, Excel China, Excel India and Excel Emerging Europe.

The four Excel Funds are sub-advised by: Baring Asset Management (Asia) Ltd. in Hong Kong, China managing the Excel China Fund; Birla Sun Life AMC Ltd. in Mumbai, India managing the Excel India Fund; Banco Itau – Unibanco in Sao Paulo, Brazil managing the Excel Latin America Fund; and Baring International Investment Ltd in London, England managing the Excel Emerging Europe Fund.

This combining of four existing funds with proven track records provides investors the opportunity to purchase one fund instead of four.

"The BRIC nations represent more than 40% of the world's population and are among the fastest growing economies," says company President and CEO, Bhim D. Asdhir. "Yet, on the whole, Canadian investors have less than 1% of their investment portfolios invested in these economies. These markets are too big to ignore, as the combined GDP of the BRIC nations now exceed the GDP of the United States of America."

The management fee is scheduled to be 2.5% which is the same as each of the four current funds.

The fund may be purchased with a $500 minimum investment and has both-front end and deferred sales charge options. Speak to your financial advisor if you are interested in making an investment in this fund.

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Money Magazine Hoss

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BMO Introduces Nine New ETFs

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Bank of Montreal (BMO) on Oct 26, 2009 added nine new funds to their stable of Exchange Traded Funds (ETFs). This brings the total of ETFs in the BMO barn to thirteen.

The new ETFs are comprised of an exacta of industry diversified funds:

1. BMO International Equity Hedged to CAD Index
2. BMO Emerging Markets Equity Index

A trifecta of "equal weight" industry sector funds:

1. BMO S&P/TSX Equal Weight Banks Index
2. BMO S&P/TSX Equal Weight Oil & Gas Index
3. BMO S&P/TSX Equal Weight Global Base Metals Hedged to CAD Index

The remaining four new ETFs are fixed income funds. Three of these fixed income funds invest in federal, provincial and corporate issues, and the fourth is hedged to the Canadian Dollar.

1. BMO Short Federal Bond Index
2. BMO Short Provincial Bond Index
3. BMO Short Corporate Bond Index
4. BMO High Yield U.S. Corporate Bond Hedged to CAD

The following document provides the investor with the names, symbols and current management expense ratio (MER) for these nine new BMO exchange traded funds.




Investors may find these new additions to the BMO stable of EFTs a worthwhile bet.

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The Hoss
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PH&N Bond Fund Series D: A Best Bet Mutual Fund

Another Hoss's best bet mutual fund is The PH&N Series D bond fund. This is another fund that the Hoss and Mrs. Hoss hold in their portfolio.

The PH&N bond fund is a fixed income fund whose fundamental investment objectives are to provide relatively high yields and stability of capital by investing primarily in a well-diversified portfolio of fixed income securities issued by Canadian governments and corporations. This fund is suitable for investors with a low tolerance for risk.

According to the PH&N website, annualized compound rates of return As of September 30 2009, are as follows:

1 year 13.6%

3 years 5.3%

4 years 5%

5 years 5.7%

10 years 6.5%


As of September 30, 2009 the top ten holdings were:

Prov. of Ontario Return: 7.60% Matures: Jun 02/27 (Total % of fund 12.2%)

Prov. of Ontario Return: 4.30% Matures: Mar 08/17 (Total % of fund 4.7%)

Canada Housing Trust Return: 3.15% Matures: Jul 15/14 (Total % of fund 3.4%)

The Toronto-Dominion Bank Return: 5.38% Matures: Nov 01/12/17 (Total % of fund 3.3%)

Morgan Stanley Group Inc. Return: 4.50% Matures: Feb 23/12 (Total % of fund 2.6%)

Prov. of Ontario Return: 4.40% Matures: Jun 02/19 (Total % of fund 2.5%)

Canada Housing Trust Return: 4.10% Matures: Dec 15/18 (Total % of fund 2.3%)

The Bear Stearns Companies Inc. Return: 4.35% Matures Jul 20/12 (Total % of fund 2.1%)

Wells Fargo Financial Canada Corp Return: 5.20% Matures: Sep 13/12 (Total % of fund 2.0%)

Canadian Imperial Bank of Commerce Return: 5.00% Matures: Sep 10/12 (Total % of fund 2.0%)

The fund pays interest dividends quarterly and capital gains (if any) yearly.


For more information on this fund visit PH&N

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The Hoss
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Hoss's Best Bet Mutual Funds: Bond Funds

PH&N High Yield Bond Fund

Starting with today's edition, Money Magazine Hoss will begin a series of posts in which he reviews his best bet mutual funds.

Fixed income Bond Funds are the first category of mutual funds Money Magazine Hoss has selected for review.

The Hoss and Mrs. Hoss have included the PH&N High Yield Bond Fund, in their stable of mutual funds.

When the Government of Canada introduced the tax free savings account in 2009, The Hoss and Mrs. Hoss invested the maximum permissible amount in The PH&N High Yield Bond Fund. How has this fund performed? Since their initial investment on January 26, 2009, The Hoss and Mrs. Hoss have realized a return of over 14%.

The PH&N High Yield Bond Fund investment objectives are to provide a high level of income and the opportunity for capital appreciation by investing primarily in a well-diversified portfolio of fixed income securities issued by Canadian corporations.

To achieve the fund's investment objectives, the manager invests primarily in medium quality Canadian corporate bonds and preferred shares and government bonds issued or traded in Canadian and U.S. dollars. The average term to maturity of the portfolio is managed within strict guidelines, typically between three and ten years.

If you are an investor with low or moderate risk looking for a bond fund with high levels of current interest income, this fund may be of interest to you.

As with all Mutual Funds there is some risk with the purchase of this fund. The principal risks associated with an investment in this fund are market, interest rate, credit and liquidity risks.

For more information see PH&N High Yield Bond Fund.

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The Hoss
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Working Capital Per Dollar of Sales

From The Hoss's Mouth

Working Capital Per Dollar of Sales is another financial calculation investors use when analyzing the performance of a company. This calculation tells the potential investor the approximate working capital a company should have.

Simply put, working capital is Current Assets minus Current Liabilities. Working capital per dollar of sales is the Working Capital divided by Total Sales and is expressed as a percentage.

Working Capital Per Dollar of Sales = (Current assets - Current liabilities)/Total Sales.

Current assets and liabilities can be found on a company's Balance Sheet, and total sales is found on a company's Income Statement.

The trick for investors is recognizing the fact that working capital per dollar of sales varies across industry types.

For example, retailing businesses with substantial low cost sales require a working capital per dollar of sales of about 10 to 15 %, while industrial manufactures who produce high cost merchandise require 25 to 30%. Companies such as fast food chains, due to the cash nature of their business, often operate with a negative working capital per dollar of sales.

Smart investors, when analyzing prospective companies, are always cognizant of the fact that the character of the business plays a huge part in determining the amount of working capital per dollar of sales a business requires.

Money Magazine Hoss hopes you will find this information useful.

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Money Magazine Hoss

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Calculating Return on Assets (ROA)

From The Hoss's Mouth

Return on assets (ROA) is a tool investors use to determine how competent an organization is at using its assets to produce earnings. There are two primary formulas for calculating ROA.

Method One: Net Profit Margin x Asset Turnover

Method Two: Net Income / Average Assets for the Period

Both methods are acceptable but the investor must make sure that s/he uses the same method when performing these calculations, otherwise when comparing companies the results may be skewed. Just like when calculating the win percentage of two horses in a race, a handicapper would not use a formula which calculates win percentage by using total wins divided by total races for one horse and a formula that uses total wins at today's distance divided by total races at today's distance for another. This type of comparison would not produce meaningful results.

Generally speaking, the higher the ROA the better, however remember that widely different industries produce widely different ROA's. Industries such as railroads are asset heavy and will have lower ROA's than asset light companies. So always compare companies that are in the same industries; to use an old cliche: compare apples to apples.

There are many free online financial services which provide you with ROA numbers for all companies listed on the stock exchange, therefore Money Magazine Hoss is not going to bore you with sample calculations. Why perform all these mathematical calculations yourself when somebody is doing it for you and for free? For example, a quick look at Yahoo Financial shows that Amazon has a ROA of 6.93%.

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Money Magazine Hoss

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Calculating Return On Equity (ROE)

From The Hoss's Mouth

Financial analysts differ in their opinions of the value of using Return On Equity calculations to evaluate whether or not to buy shares in a company. Before Money Magazine Hoss gives you the pros on cons of this argument, lets examine the equation for calculating Return On Equity (ROE).

ROE= Net Income/Shareholder Equity

Financial analysts in favour of using ROE as an indication of when to buy stock suggest that you track ROE, and when you see a company with a double digit ROE and which is continually increasing it might be wise to consider buying the stock. You can use one of the many free or pay for service financial web sites available on the Internet for tracking ROE. Note: Not all continue to list ROE, but many do.

Other financial analysts consider ROE to be of little or no value to the potential investor. They point out that Net Income is not always a reliable corporate performance measurement. Why? Because companies use varying accounting procedures when calculating items such as capitalization, depreciation and growth rate, to name a few. Therefore, they conclude the formula for calculating ROE is not always reliable to determine a company’s success or corporate value.

The differing opinions are not unlike those of handicappers selecting a horse to bet on. Some use a horse’s total earnings divided by total races to determine the horse’s potential class. Many handicappers frown on this practice, as it does not take into account other factors such as but not limited to age, sex, distance, and surface.

In summary, the use of ROE by investors as a tool for investment purposes is a matter of personal choice.

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Money Magazine Hoss

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Interest Coverage Ratio

From The Hoss's Mouth

Interest coverage ratio is the topic of today's Hoss Cents Free Financial Money Magazine. This ratio indicates a company's capacity to make its interest payments (on all outstanding debts) with its earnings before interest and taxes. Think of it this way, how often could you make the interest payments all your outstanding debts with your annual pre-tax income? This is of great importance to bond and preferred stock investors. It gives these investors an indication of the company's financial stability and how far earnings can fall before possible bond or preferred stock payment defaults.

The higher the ratio the less a company is burdened by debt expense. A company's ability to meet interest expenses becomes suspect when the interest coverage ratio is 1.5 or lower. An interest coverage ratio below 1 is a strong red flag, as the company does not have sufficient revenues to pay its interest expenses. Exception: Some companies may have no debt and therefore no interest payments, in which case their Interest coverage ratio would be 0, which of course is excellent.

Interest coverage ratio is calculated as follows:

EBIT (earnings before income and taxes) divided by Interest Expense.

Money Magazine Hoss will again, as in Calculating Gross Profit Margin Percentage and Calculating Operating Margin, use the Income Statements of Amazon, Google and GM for demonstrating how to calculate interest coverage ratio.

Interest Coverage Ratio for Amazon:

2006: $455,000/$78,000 = 5.8

2007: $737,000/$77,000 = 9.4

2008: $972,000/$71,000 = 13.7

In all three years Amazon's Interest Coverage Ratio is well above the warning level of 1.5. In addition the ratio has increased each year which is a positive signal.

Interest Coverage Ratio for GM:



2006: $11,998,000/$16,945,000 = .71

2007: $-3,351,000/$2,902,000 = -1.15

2008: $-27,043,000/$2,345,000 = -11.53

If you considered buying GM stock in 2006, the interest coverage ratio of .71 would have been a warning sign that things were not at all well with this company. The continued deterioration in 2007 and 2008 confirmed this warning sign: Definitely a poor investment. In fact as we all now know, GM subsequently filed for Chapter 11 bankruptcy protection.

Interest Coverage Ratio for Google:



2006: $4,011,297/$257 = 15,608.16

2007: $5,675,183/$1,203 = 4,717.52

2008: $5,853,596/$0 = 0

Google once again is the star. Its ratios are off the chart, and in fact as can be seen in the year 2008, they had no interest expense.


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Money Magazine Hoss

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Calculating Operating Margin

From The Hoss's Mouth

Operating Margin

Money Magazine Hoss occasional will wager a dollar or two on the ponies (regular readers of the blog are well aware of this). Before investing a wager on a horse, he likes to measure the efficiency of each horse in the race using several different handicapping tools. For example, he will divide a horse's total wins by total races to obtain the horses win percentage and compare that figure to the other horses in the race. Wise investors also use several mathematical calculations to measure a company's efficiency before buying stock.

In his last post, Money Magazine Hoss showed you how to calculate Gross Profit Margin Percentage. This week, Operating Margin or Operating Profit Margin is explained. Companies with a high operating margin usually have lower fixed costs and better gross margins than their competitors. This gives them some flexibility in determining prices, which can be an advantage during economic down turns.

Operating Profit Margin is calculated as follows:

Operating Profit Margin = operating income (divided by) total revenue.

Money Magazine Hoss will again use the 2006, 2007 and 2008 income statements of Amazon, General Motors and Google.

Amazon's Operating Margin:

2006: $389,000/$10,711,000 = 3.6%

2007: $655,000/$14,835,000 = 4.4%

2008: $842,000/$19,166,000 = 4.4%





General Motors Operating Margin:

2006: $9,277,000/$207,349,000 = 4%

2007: $-4,390,000/$181,122,000 = -2%

2008: $-21,284,000/$148,979,000 = -14%





Google Operating Margin:

2006: $3,549,996/$10,604,917 = 33%

2007: $5,084,400/$16,593,986 = 30%

2008: $6,631,969/$21,795,550 = 30%


Now, Money Magazine Hoss is not a genius, but if this was a horse race, it wouldn't take a genius to figure out Google is the best bet, Amazon is worth a look, but General Motors should be put out to pasture.

Stay on Track,

Money Magazine Hoss

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Investment Strategy Dollar Cost Averaging

From the Hoss's Mouth

What is dollar cost averaging? Hoss Cents Free Financial Money Magazine defines dollar cost averaging as the technique of investing a fixed amount of money on a predetermined schedule regardless of the per unit or share price. Dollar cost averaging can be a very effective investment strategy, especially if you are prepared to make regular investments over a long period of time.

If you are a regular reader of Hoss Cents Free Financial Money Magazine you will have already read his post beginner investing which suggests what steps should be taken before you start an investment program.

Now, for a look at how dollar coast averaging works as an investment strategy...

In each of the three scenarios below our fixed investment amount is $100, and our predetermined schedule is on the first of each month.

Investment Scenario One: Per unit price continually increases.

Month	Invested	Cost	Units	Total Units	Invested	Value	Profit
Jan	$100	$10.00	10	10	100	$100.00	$0.00
Feb	$100	$11.00	9.09	19.09	$200.00	$210.00	$10.00
March	$100	$12.00	8.33	27.42	$300.00	$329.09	$29.09
April	$100	$13.00	7.69	35.12	$400.00	$456.52	$56.52
May	$100	$14.00	7.14	42.26	$500.00	$591.63	$91.63
June	$100	$15.00	6.67	48.93	$600.00	$733.89	$133.89
July	$100	$16.00	6.25	55.18	$700.00	$882.82	$182.82
Aug	$100	$17.00	5.88	61.06	$800.00	$1,037.99	$237.99
Sept	$100	$18.00	5.56	66.61	$900.00	$1,199.05	$299.05
Oct	$100	$19.00	5.26	71.88	$1,000.00	$1,365.67	$365.67
Nov	$100	$20.00	5	76.88	$1,100.00	$1,537.54	$437.54
Dec	$100	$21.00	4.76	81.64	$1,200.00	$1,714.42	$514.42

Due to the constant increase in per unit cost, the number of units purchased each month declines (10 in the first month, 4.76 in the last) . At the end of the 12 months your investments are worth $1714.42, an increase of $514.42 over your purchase price, which is a profit of 42.86%.


Investment Scenario Two: Per unit price declines for the first five months and then increases for the next five months.

Month	Invested	Cost	Units	Total Units	Invested	Value	Profit
Jan	$100	$10.00	10	10	100	$100.00	$0.00
Feb	$100	$9.00	11.11	21.11	$200.00	$190.00	($10.00)
March	$100	$8.00	12.5	33.61	$300.00	$268.89	($31.11)
April	$100	$7.00	14.29	47.9	$400.00	$335.28	($64.72)
May	$100	$6.00	16.67	64.56	$500.00	$387.38	($112.62)
June	$100	$5.00	20	84.56	$600.00	$422.82	($177.18)
July	$100	$6.00	16.67	101.23	$700.00	$607.38	($92.62)
Aug	$100	$7.00	14.29	115.52	$800.00	$808.61	$8.61
Sept	$100	$8.00	12.5	128.02	$900.00	$1,024.13	$124.13
Oct	$100	$9.00	11.11	139.13	$1,000.00	$1,252.14	$252.14
Nov	$100	$10.00	10	149.13	$1,100.00	$1,491.27	$391.27
Dec	$100	$10.00	10	159.13	$1,200.00	$1,591.27	$391.27

Here your profit would be $391.27 (32.6%) and have a total of 159.13 units.


Investment Scenario Three: The per unit price fluctuates over the 12 month period.

Month	Invested	Cost	Units	Total Units	Invested	Value	Profit
Jan	$100	$10.00	10	10	100	$100.00	$0.00
Feb	$100	$12.00	8.33	18.33	$200.00	$220.00	$20.00
March	$100	$11.00	9.09	27.42	$300.00	$301.67	$1.67
April	$100	$13.00	7.69	35.12	$400.00	$456.52	$56.52
May	$100	$12.00	8.33	43.45	$500.00	$521.40	$21.40
June	$100	$14.00	7.14	50.59	$600.00	$708.30	$108.30
July	$100	$13.00	7.69	58.29	$700.00	$757.71	$57.71
Aug	$100	$15.00	6.67	64.95	$800.00	$974.28	$174.28
Sept	$100	$14.00	7.14	72.09	$900.00	$1,009.32	$109.32
Oct	$100	$16.00	6.25	78.34	$1,000.00	$1,253.51	$253.51
Nov	$100	$15.00	6.67	85.01	$1,100.00	$1,275.17	$175.17
Dec	$100	$15.00	6.67	91.68	$1,200.00	$1,375.17	$175.17

This scenario is probably the most realistic of the three investment scenarios in demonstrating actual conditions. Here your investments would should a profit of $175.17, or a 14.6% profit.

Dollar coast averaging is particularly useful to those investors with a long investment horizon and who can dedicate a certain amount for investments. The primary advantage of using a dollar cost averaging as an investment strategy is that it removes the problems associated with trying to time the market. In addition, most mutual fund companies and investment firms provide an automatic purchase plan. In fact, The Hoss uses the automatic purchase plan provided by his mutual fund company. It is very convenient and enables him to make purchases on a regular basis without fail.

Stay on track,

The Hoss


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