Cost Averaging Bank Shares - Is Now the Time?

ThankYouAndEnjoy!

Hello

I purchased 1190 shares in Barclays @ a cost per share price (including dealing charges) of £4.93. Yesterday, Barclays shares stood at £4.1025

Now; i have £2100 available to buy more shares, and am thinking of increasing my stake; by my calculations, this should give me an additional 510 shares or so, taking my cost per share average down to £4.68

With the prospect of 'rights issue' (although i have heard nothing yet to suggest Baclays is going down this route) what are the pros/cons in taking the above action? -

Im worried/concerned that i either will

A - 'miss the boat' & lose out on buying some 'cheap' shares
B - will but more shares to 'cost average' and then have to fork out even more if a rights issue goes ahread

Is this the chance i take?

[Deleted User]

Cost averaging is a excellent investment strategy as it reduces our human propensity to make wrong decisions. Such a strategy would see a investor picking maybe 10 good long term stocks and simply adding to it over a period thus buying at the highs and the lows and ultimatly getting a fairer price.

But the rumours about Barclays may well come true thus I would keep about 1/3rd the size of your holding in cash, just in case. Because if a RI occurs professional traders will force the market down so that they can pick up the stock at a steal from forced sellers.

ThankYouAndEnjoy!

hello

thanks for your response.

Im keen to invest the £2100 is 1 lump sum, so am not too concerned over dealing charges etc. After initial investment, ideally i would like to invest £150 /month in Barclays or LloydsTSB. I have read about the Halifax Sharebuilder account (£1.50 per trade); a 1% fee which sounds like my best option, however i can find no information about the 'commission charges' being imposed from 07/2008. Does anyone have any info re this?

johng_uk

i can find no information about the 'commission charges' being imposed from 07/2008

No, but I'd certainly be interested in the outcome of this question.