Dividend Collecting 101: Building a position

The stocks posted in the end of the month stock alerts will all be at a monthly low close of 1 year or more.  I use this low monthly closing price as a trigger point to begin to build a position in a company.  If the price continues to fall over the following months, which it often does, I’ll continue to buy shares at the end of the month if that price is below my average cost per share whether the close is at a monthly low close for the year or not.

For instance, if I bought 100 shares at yearly low monthly close of $10 and then a second 100 shares at $8 the next month, the average cost per share would be $9.  If going forward, the monthly close is $9 or less, then I will add shares regardless of whether the monthly close is a yearly low or not.  These purchases will not be posted in the monthly stock alerts. 

I continue to purchases shares under this scenario until the close moves above the average and climbs higher.  At that point, I begin to look for new monthly close trigger points to begin again.

Author: The Dividend Collector

Searching for dividends on sale.

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