Ask a Tim
Ask a Tim
Finally an answer to all your questions about everything. Not only an answer, but an answer from a Tim! E-mail all questions to AskingTim@Gmail.com or by clicking on the link on the left hand menu bar titled "Get your questions answered" and leaving a comment! I will reply (if I can) as soon as possible!
Wednesday, October 12, 2005
Business class was never so gassy!
Dear Tim,
Are gas prices starting to go down? Is now a good time to fill up or just get a few bucks worth?
Dear Combusting,
Gas prices will do, what gas prices will do. Typically, that means going up, but every now and then it will drop by a few cents for a couple of days.
I will rarely fill up my tank these days (mainly because its too depressing) unless I find a gas price that $.15 to $.20 below everywhere else. Then I will fill up like its going out of style.
Usually though, I take some of things I learned as a business major, and apply it to world of gas consumption. I use Dollar Cost Averaging when purchasing gas.
Dollar Cost Averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts. Instead of investing one large lump sum, the investor works his way into position by slowly buying smaller amounts over a longer period of time. This spreads the cost basis out over several years, providing insulation against changes in market price.
Though this works in investing, it may not necessarily work in buying gas... ...but I feel that it does. So I may buy at $2.99 one day, but get it at $2.90 the next time I buy. So by spreading out my purchases I am effectively buying at an average of all the prices I pay.
Now you may be asking, "Well Tim, why don't you just fill up when its $2.90?" Well you silly, bad investor, it may be $2.90 today, but it could be $2.85 tomorrow!
So whether you decide to use the techniques of Dollar Cost Averaging, Diversification, Tax-free annuities, or good old-fashioned hoarding, one thing is certain. You like to drive. You need to drive. And gas is the only thing that makes that happen! So until demand drops, or supply increases, expect to continue to pay more for your gas. Its a great investment!
Are gas prices starting to go down? Is now a good time to fill up or just get a few bucks worth?
-Combusting in Compton
Dear Combusting,
Gas prices will do, what gas prices will do. Typically, that means going up, but every now and then it will drop by a few cents for a couple of days.
I will rarely fill up my tank these days (mainly because its too depressing) unless I find a gas price that $.15 to $.20 below everywhere else. Then I will fill up like its going out of style.
Usually though, I take some of things I learned as a business major, and apply it to world of gas consumption. I use Dollar Cost Averaging when purchasing gas.
Dollar Cost Averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts. Instead of investing one large lump sum, the investor works his way into position by slowly buying smaller amounts over a longer period of time. This spreads the cost basis out over several years, providing insulation against changes in market price.
Though this works in investing, it may not necessarily work in buying gas... ...but I feel that it does. So I may buy at $2.99 one day, but get it at $2.90 the next time I buy. So by spreading out my purchases I am effectively buying at an average of all the prices I pay.
Now you may be asking, "Well Tim, why don't you just fill up when its $2.90?" Well you silly, bad investor, it may be $2.90 today, but it could be $2.85 tomorrow!
So whether you decide to use the techniques of Dollar Cost Averaging, Diversification, Tax-free annuities, or good old-fashioned hoarding, one thing is certain. You like to drive. You need to drive. And gas is the only thing that makes that happen! So until demand drops, or supply increases, expect to continue to pay more for your gas. Its a great investment!
:: posted by timothy, 7:52 AM
