AIM RE-bal

[2mc]

I'm sorry I'm being as clear as mud. And, I have a degree in Communication! <lol>

You've almost got it. However, I do *not* keep the average true cost (LIFO) of each ETF. I only keep it on the group of ETFs (and since I have 2 groups, I have two average true costs to calculate). But, you may ask, what is a share of the group? Good question. Treat it like a mutual fund. You can arbitrarily set the shares of your mutual fund to anything you want - 100 shares, 1000 shares, 100000 shares. Your initial cost per share will be the total invested divided by this arbitrary amount.

Now, whenever you make a "purchase" - that is, you move money from cash to the invested side - the cost per share of this new transaction will be the current value of the investments divided by the number shares invested (that is, the number just prior to the new additions).

So, you ask how do I know what to buy of which ETF? Well, FolioFN helps me with that. I can set up weights for each ETF in my group. A weight is that percentage of the whole group that the ETF holds. Since I am always rebalancing, those percentages never change. So, I tell FolioFN: the total amount in the invested side should be $X and rebalance to original weights. If you're not in FolioFN you will have to make the calculations yourself. I don't have tax or commission concerns so I don't have to set a minimum. You may have to set a minimum trade.

Hope that makes things a little clearer.

Matt