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Friday, 04/18/2003

DRIP investors - "Carpe Diem"- Seize the Day
by Steve Gail

With the U.S.- Iraq war winding down to only periodic news segments on MSNBC and the other major networks. One can begin to pay attention to new DRIP investments that may offer opportunities that may have had uncertainties due to the ongoing war with Iraq. DRIP investors should take this opportunity to closely re-examine companies that they believed where attractive before the confrontation with Iraq. The stock market, just like human nature, does not like uncertainty. As long as issues are unresolved, people tend not to be able to make clear and concise decisions due to the fact that overriding events that could effect their decisions are unclear. This now provides an excellent opportunity in which DRIP investors, novice, current and experienced need to due some soul searching and research on their own, especially if they were about to make a purchase in a stock issue that now is lower priced then when they originally considered to purchase it. Let me pose a hypothetical example of a decision that you might have been contemplating before the war.

Hypothetical Example: Suppose you were interested in JJJ Corporation selling at a price of 25 before the outbreak of hostilities with Iraq, now as the war proceeded your JJJ started to sell off and now is trading at a price of 19. Do you commit of not to the JJJ purchase in a DRIP account? Maybe by posing several of these questions to yourself you may have a better idea as to how to proceed.

1. Has anything changed about the company that you were considering starting your DRIP investment with?

2. Are their now other DRIP candidates that you consider to be more attractive then JJJ Corporation is presently?

3. Has the stock price of JJJ Corporation fallen to a price that you would buy it under ANY circumstances if you had the opportunity?

If you answered yes to questions #1 and/or #3, then you have no alternative but to step up to the plate.

WHY?

First, if the fundamentals of the JJJ are the same when the stock was trading at 25 and you liked the stock, then if those fundamentals are still their at 19 you have to love the stock even more.

Second, if the stock has fallen to a price that you considered buying under any circumstances, this is a slam-dunk decision; you have to start the DRIP account.

Third, A simple issue, nobody rings a bell at the very bottom of the market to let you know when the bottom is in place, if that were the case we'd all be millionaires. This is one of the reasons why we pick a DRIP, a time and a price and we start automatic investment plans, with equal periodic investments, which gives us a dollar-cost-averaging effect. We purchase more shares when the stock price is down and less when the stock price is up.

Of course, if other DRIP candidates became more important then your JJJ Corporation consideration, then naturally, you would consider them as a higher priority for a DRIP purchase.

The basic argument is that this time, here and now provides DRIP investors an opportunity to step up to the plate and make purchases with a little more certainty in the overall market, because the uncertain issues surrounding the war are a lot more clear at this juncture in time. And eventhough, their are other economic issues that still could have profound effects on the stock market, as a DRIP investor you no longer have an ongoing war impacting and clouding your investment decision at this current moment. DRIP investors "CARPE DIEM". That is Latin for "SEIZE THE DAY" for all you DRIP investors and potential DRIP investors, here is an opportunity for you all to "SEIZE THE DAY"

Until next time,
CARPE DIEM

 
 

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