Hi Toofuzzy, most on how the system work's is explained in posts 452 and 453. In post 453 disregard the PS: about short selling and buying on margin!
>>>>I do need people to download and play with the spreadsheet and give me feedback on this feature, is it good or bad? Do you think it would be better to rebalanced even though the price did not move? I can see debating it either way.<<<< I can see the Hi - Low formula either telling you what % of stock to OWN in your TOTAL portfolio or telling you what % to invest with the CASH you have left (and just added). I can't see it telling you to invest some % of your TOTAL portfolio if your portfolio is $100,000 and you are adding $500/month. If it is the first (% of stock to OWN) then you will own very little stock as it approaches its HIGH and will be 100% invested as it reaches a previous low.
I think I see what I should do here, If a person is adding or removing money, the portfolio should be rebalanced if the amount exceeds x amount( this may end up being a percent of total portfolio value, maybe 10%), otherwise the re-balancing would wait until the price change exceeds the buy/sell trigger percents.
If it is the first (% of stock to OWN) then you will own very little stock as it approaches its HIGH and will be 100% invested as it reaches a previous low.
As you added more money near a low it would all be invested. If that is what you are doing it sounds even more straight forward than AIM. As it breaks an old HIGH you have nothing invested though. I am trying to make it straight forward and hopefully easier than aim.
On the high and low price points, one can change them anytime one wants to new values, this is up to each investor, and is the most subjective and hardest part of the system. currently the high/ low ratio settings are set on the setup page. I think I need to add the ability to change them on the second sheet also. If one is absolutely sure what the high and low prices should be, one should set the ratios at 0% and 100%. But how many of us are that sure? If you set the high ratio at 10% and the low ratio at 90%, no matter how high the stock goes you stay at 10% of total portfolio value invested, and if the stock drops you still have 10% of total portfolio value in cash.
It is a very flexible system, say you are a senior investor, And you want your money invested in stocks and bonds in roughly 40/60 percent but you are willing to have it very by +- 10% just set your low ratio to 30% and the high ratio to 50% on each of your stocks. I suppose once a year one would still want to re-balance your stocks.
Come see me at Systematic Investing group #board-966 lets talk formula plans.
