Hi Will, Re: Range around target Cash Reserve...........................
Yes, you are correct in your example. For me, if I was going to see a 4% rise in the cash reserve with a Sale, I'd want to let the cash reserve level to drop to maybe 27% with a 30% target cash. Then, the sale would satisfy cash requirements without over-shooting the actual cash by too much. It would rise to around 31%. Then if the cash target remained steady (risk assessment) that would be followed by yet another vealie down the road if the value continued to rise (shares times price/share).
Actual Cash Reserve percentage, then, can "drift" + or - maybe 3% from the target cash level. Vealies happen if cash is close to, at or above the target level and sales happen if the cash is roughly 3 points below the target. Even if the price/share should double, then at the end you would still be roughly 30% of that ending AIM value. This assumes the target cash (and risk assessment) remain constant.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy.....