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THE HERALD Wednesday April ll Page IS Trying to beat the market a frustrating challenge Trying to beat the market to make a financial killing is one of the most frustrating challenges which investors face the stock market as if it is a Las Vegas casino is a crap- shoot Why try something that confounds even the experts You either have to be a clairvoyant or extremely lucky consistently Soothe your nerves Try another more sensible strategy dollar cost averaging This strategy calls for the in vestment of a fixed amount of money in mutual fund shares at regular intervals during a specified period of time By following this strategy investors will actually lower the average cost of their periodic in vestments The principle of dollar cost averaging is simple As the snares values rise investors buy fewer shares As the value falls investors buy more For example suppose you decide to invest a month in a mutual fund When you start the funds shares cost each So your buys you 10 snares During the next four months the funds price per share rises from to then drops to and later to 8 At the end of these four months you will have shares or additional snares than if you had invested a lump if ITS YOUR MONEY Paul J Rocket next six months the price swung up and down reaching as high as 16 and falling as low as then returning to 15 as you can see in the following table sum of to buy snares all at once The beauty of dollar cost averaging is that investors dont have to worry about market tim ing They are buying shares con sistently whether the market goes up or down It also eliminates the temptation to stop buying when the shares drop in value or to go wild spending when shares start rising You become detached oblivious to market shifts Like the classic advice says you are buying low and sell ing high By taking advantage of dollar cost averaging the average cost of all the shares investors have bought is less than the average prices of those shares when the Investor bought them The lower average cost will im prove the investors position even more and also provide himher with capital gains For example lets say you in vested 100 a month for only six months Since the share price in the first month was 15 you bought shares During the uirn II mm As you can see your invest ment grew by for a gain of 68 per cent If you made a single investment you would have about broken even after six mon ths By using dollar cost averag ing you have come out ahead However to really benefit from this strategy you must invest for the long term What is interesting is that investors benefit more us ing dollar cost averaging during a time of falling share prices than one with rising prices So what are you waiting for In the long run you could be a big winner For a free chart illustrating how Dollar Cost Averaging can affect your investment returns Shop around for best mortgage rate ByDIANNEMALEY Business Analyst Thomson News Service Last week we said that the recession was over although it may not be apparent yet Infla tion has been beaten and interest rates will follow inflation down we predicted This week right on cue bankers cut their prime business lending rate to per cent Sounds good doesnt it But lets put things in perspective This latest cut takes the key lending rate back to where it was in the summer of 1988 While the news was welcome interest rates are still high by historical standards Homeowners with mortgages have little reason to celebrate By the time you read this the one- year mortgage rate may have slipped below per cent But the key fiveyear rate still is stub bornly high As I write it is per cent Even if lenders pare it by half a point it would still be high Remeber it was per cent as recently as March THEY HAVE REASON Back in January I expected the cost of fiveyear mortgage money would fall to per cent by this summer Now I dont think it will For one thing lenders are burdened by bad mortgage loans For another real estate sales in some parts of the country are hit- ling record highs In Vancouver for example houses changed hands in March That was the busiest month in the years that the Vancouver Real Estate Board has been recording sales Ap parently the recession has had little effect on Vancouver Inexplicable though this behavior may seem to observers in glum Toronto it will not go un noticed by the men who hold the money reins Finance Minister Michael Wilson and the governor of the Bank of Canada John Crow Lenders also are not likely to want to encourage strong de mand for mortgage loans So while the party may be roar ing on the West Coast I suspect the money men are about to take away the punch bowl Look for a levelling off in longerterm mor tgage rales until midsummer when they could fall a bit further So what if the fiveyear mor tgage rate is stuck at per cent you might say Ill take a oneyear loan Its a lot cheaper Perhaps What is not so clear is which route will be cheaper over five years a rate fixed for the full term or one that fluctuates from year to year MORTGAGE ROULETTE If you believe that sooner or later longerterm rates will come down you might prefer an open mortgage even though it will be more expensive than a closed one Most lenders are charging threequarters of a percentage point more for a one- year open mortgage But if you believe inflation will prevail over the governments ef forts to vanquish it you may decide to lock in for a longer period of time Unfortunately no one can know the future A word of caution When pondering inflation disregard the booming Vancouver real estate market Disregard also the recent sales resurgence In southern Ontario Chances are the glee will be shortlived either it will die naturally or policy makers wilt kill it Optimist argue that Inflation is under control Pessimists argue just as eloquently that it is not Only time will tell In the mean time you have to renew your mortgage The best thing to do is choose a term and a monthly pay ment that you feel comfortable with HR Block stands behind its work We guarantee your satisfaction And our experience in preparing complete and accurate tax returns will give you peace of mind HR Canadas Tax Team Put us to work for you Under New Ownership In A New Location 7 JAMES STREET OH Main St Downtown Georgetown 8737855 contact Peter Masson MBA Regal Capital Planners Ltd 10 Drive Georgetown On tario or phone 8777216 Paul J Rockel is the author of the best seller Why I Invest In Mutual Funds and President of Regal Capital Planners Ltd Have you seen whos reading The Helton Hills ERALD lately The Herald It teen by ALL of Hlllt and it the only newspaper to give the reader one complete news and package featuring local stories about local people and events which concern our com munity If you wont your Dullness to be seen by everyone give our display advertising deportment a call Our professionally trained represen tatives can answer all your questions I The Halton Hills HERALD DONT TAKE YOUR BUSINESS TO THE STREETS LET 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