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What do you think: one should buy now or after the split?



Buying after will make your taxes/accounting easier since you won't need to remember what to divide by 7.

Source: SUNW + stock purchase plan + multiple splits = headache at tax time


What's really fun is, you bought a stock a long time ago, it spun off some other companies which got acquired by yet other companies, such that you now own several stocks, all attributable to the purchase of that one stock a long time ago. Now you sell some of the resulting stocks, and you need to compute your basis in order to figure the taxable capital gain or loss. This entails looking up the ratios from the various spin-off / acquisition events to determine how much of the original cost to allocate to the sold shares.


One should not try to time the market. Dollar cost average into it.


Dollar cost averaging only suits to lower volatility a bit, but has nothing to do with returns. This can help you as much as it can hurt you. If you're plunking down significant cash into a single tech stock then I don't think volatility is your main concern.


You're either the kind of person who has an investment thesis that you're executing on, trying to time the market for optimal returns, or you're the kind of person who should cost average into the stock. Based on the question the GP asked, they're in that second group.


If you make the random walk assumption then DCA doesn't improve expected returns. Those who expect higher returns are (perhaps unknowingly) relying on unjustified cyclic patterns in prices and trying to exploit that inefficiency.

DCA can reduce risk in theory, but only if you consider USD a risk-free asset. If you really want to minimize risk you should buy real estate funds, commodity funds, etc. based on your expected future consumption.


False dichotomy.




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