Systematic Investing Group

[Toofuzzy]

Lostcowboy asked me to post this explanation of Syncrovest.


Syncrovest: A simple explanation of how it works.(By the book)

1)Decide how much to invest = PLANNED INVESTMENT
(ex $100/month or $500/quarter)

2)Invest 3/4 of PLANNED INVESTMENT = BASE INVESTMENT
(ex $75)

3)Each month AVERAGE COST/CURRENT PRICE = MULTIPLYER

4)MULTIPLYER * BASE INVESTMENT = INVESTMENT 1 (that month)
(This is first gear)
AND if MULTIPLYER is > 1 THEN step 5

5)(MULTIPLYER - 1) * CASH RESERVE = INVESTMENT 2 (that month)
(This is second gear)(it is an additional investment to INVESTMENT 1)Do not invest more than 50% of remaining CASH RESERVE.

6)When INVESTMENT = 1/2 or less of PLANNED INVESTMENT use MULTIPLYER * PLANNED INVESTMENT (instead of Base Investment)You have made a 50% profit at this point.(You now use third gear)

7)When Using PLANNED INVESTMENT if INVESTMENT 1/2 or less of PLANNED INVESTMENT then SELL EVERYTHING

8)Start over with PLANNED INVESTMENT * MULTIPLYER and new AVERAGE COST.(This is fourth gear). You will now have lots of cash from the CASH RESERVE to invest on any future price drop.

When your investment is again < 50% of PLANNED INVESTMENT sell everything again and start with a new AVERAGE PRICE.

In practice when you have a sale you would sell everything but your FIRST periodic investment($100).(why sell it just to immediatly buy it back).

If SYNCROVEST is sutible it would be best in a retirement fund invested in a No Load mutual fund. Otherwise the broker fees and taxes could be substantial.

I hope this is the clearest and most concise description of SYNCROVEST ever written.

Still
Toofuzzy