Fannie Mae-No Politics (FNMA)

[lambchops]

Well, the prize is in accumulating shares--which your strategy doesn't take into account. If an investor buys at a certain price and sells it for a profit, when it gaps back down (and every stock often does so because of normal cyclical movement), the profits can be put back into more buying additional shares. This stair stepping strategy helps a small investor get more and more shares.

If you bought 1000 FNMA at $2.50 sold FNMA at $5 and re-bought at $1.50 as a recent example you'd have 3333 shares.

Of course, this strategy is best used in a tax deferred account because you'll have to pay capital gains otherwise.

Thus, if one believes in a certain stock like we do with FNMA, using the price movement to accumulate more shares, is a bona fide investing strategy. Capeche?

Good investing to you!

FNMA