Asset Allocation Fun!

I've always been terrible at math. When I was six, my Dad was helping me with my homework. He was so frustrated that I didn't get addition and subtraction back then - not that I'm very good with it now. Anyway, I still remember having to literally count beans to learn basic math. The memory of it brings me to tears. Having to do math still makes me feel dumb.

So, the following might be a bit bimbo. I finally kind of get it after three decades.

I was just thinking this morning… technically if I have $3000 and I spend it on a stock that is $3 and purchase more shares of that stock vs. a stock that is currently $18, each $1 increase in share price is worth more with the $3 stock. Exactly how much is it worth? I think about 6 times more! Each $1 increase in the $3 stock is worth a $6 increase in the $18 stock. Isn’t it? Yes, it is! Of course, the proverbial double edged sword effect is also going to apply when a downwards move occurs.

So, I'm now going to pay more attention to quality stocks that have a very low entry price.