Sky high prices

Q: Why don’t you recommend some stocks not sky high in price? Most of us are not millionaires.

A: The days when high-quality companies routinely split their shares to maintain prices under $100 are long gone, and probably not coming back. The lack of stock splits in recent years has resulted in the average stock trading at a much higher price per share than was the case in the past.

Fortunately, the days when it was cheaper to buy stocks in 100-share lots are also gone, and definitely not coming back. If you have $3,000 to spend and a stock costs $500 per share, buy six shares. We have long advocated dollar-based investing, or purchasing stock based on the size of the position in dollars, rather than in shares.

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