As we have written time and time again, the Enterprising Investor should take a long-term view to investing and profit from volatility.
On way of dealing with this is by using an investing method know as ‘Buying in Thirds’. What does this mean? Well, practically speaking:
1. Identify the stock you want to buy
2. Decided how big a position you want to take, how much capital you are going to put into this pick
3. Divide the capital by 3
4. Proceed to buy though 3 separate transactions
You never know how a stock is going to behave and the reasoning is that as soon as you identify this stock you should open position and then you can sit back and see how it behaves, taking advantage of volatility to either move more money into the position or avoid a costly mistake if you had invested 100% of the sum you had initially committed.
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