The Research Of Dollar-cost Averaging Strategy Based On The Value Investment Philosophy

Stock Market has experienced a profound development since its establishment,and become more and more important in the national economy.The development of economic become faster and faster,but the investor does not get more profits in the stock market.The main reason for this is that the investment ideas and investment strategies has some problems The value of investments is a successful investment philosophy,The core of which believes that the stock market price fluctutions around its intrinsic value, stock price will return to the intrinsic value.When scock price below intrinsic value investors should be gradually buy and hold; When scock price higher than intrinsic value, investors should be gradually sell.Many researchers in academic only analysis the practial of the intrinsic value in the stock market in our country.In this paper,however,based on the intrinsic value theory,we study a common investment strategy in a quantitative analysis method in China’s stock market—dollar-cost averaging strategy.Based on the definition of dollar-cost averaging, the investment strategy was analysed quantitatively, the expression about the rate of stock returns was achieved, and the main influence factors of stock yield was summarized through mathematical analysis.Through Empirical Analysis,the investment strategy ensuring profit in the way of the dollar-cost averaging was concluded:first, finding the company with well growth; Second,choosing the security with lower costs according to the intrinsic value; Third, In the shareholding interval, according to the market of speculative, closely at the intrinsic value of the stock, when stock price below intrinsic value,investors should be gradually buy; when stock price higher than intrinsic value, investors should be gradually sell.In the above steps, We flexibly applied the intrinsic value concept and researched the strategy of dollar-cost averaging which can make the profits. In step3,.When the stock market prices below their intrinsic value, we buy additional stock with the cost of recovering, and so on. In the long run, the total cost of investment is unchanged, we can recover certain costs and use them repeatedly. Investor’s holding shares continue to increase, the cumulative average cost continued to lower. In step4,When the listed company’s growth is no longer duration, we choose to stop our strategy, and we will not limited to the predefined investment deadline. Compared to "fool" fixed investment, investors can take full advantage of the cycle of bull and bear makets of the stock market, making the investor get more returns.