Dollar Cost Averaging and Volatile Stocks  Format for Printing
Format for printing  Request Reprints   By George Runkle (TMF
Runkle)  ATLANTA, GA (Jan. 24, 2000) -- Recently, we've seen an
introduction of "Synthetic Drip" programs from BuyandHold.com
and Netstock Direct (Sharebuilder). Soon, The Moneypaper will be
introducing a program. I was rather excited by all this because
the programs allow us to invest in companies like Cisco Systems,
which come under the "Pathfinder" definition that I've given
companies that are opening up the Internet.  I also thought that
the volatility of many stocks would work in a Drip investor's
favor. It seemed that stocks with strong moves relative to the
average market indices might benefit from dollar cost averaging.
The measure of this volatility is "beta." A stock with a beta of
one moves up and down, lockstep, with the market, while a stock
with a beta of two moves twice as much as the market, and so on.
Theoretically, if the market goes up or down 10%, a stock with a
bet