Don't Get Too Cute on Buying Price

I worked with an investment client last year and recommended that he buy $50,000 of Google shares as a complement to his portfolio, because the company appeared to be undervalued with a limited downside.

At the time the share price was $90.50 per share and the client decided he wanted to buy $25,000 at $89.90 and another $25,000 at $89.50.

It is his final decision so we moved forward on this basis, fortunately picking up a buy order at $89.90 almost immediately.

And then we waited to pick up the buy order at $89.50, and we waited some more, and we are still waiting! The share price stands at $136.80 today.

So when it seems smart to try and get the buy order a little bit lower, you are gaining very little but potentially missing out on a lot more. It is better to just buy into the company if you have done your research, and you are confident in the long term potential.

Or if you are worried about buying on an unlucky day, set buy orders based on time, not price. Buy some today, buy some next week, and buy some more the week after, and get the average price. At least this way, you got yourself invested and are not 1 year later thinking about putting in a buy order 50 cents below the current share price of $136.80!