Systematic Investing Group

[Toofuzzy]

Hi LC


I wonder how it would work if you set it up to be bombproof simple which would also address some of Aim Hier's issues.

1)Use either the 52 week high and low or absolute historical high and low.

2)Be 100% invested at low and 0% invested at high

3) formular: (High-Current Price)/ (High-Low Price) = % invested

ex: Start with $2,000 and invest $200/month
price is halfway between high/low so invest $1,000 in stock
price is the same next month but adding $200 so invest $100
there is now $1,100 in cash

the next month the price drops so that the formular says to be 75% invested so: Add the current stock value to the $1,100 in cash plus the additional $200 cash added for the month. 75% of that is the amount of stock you want to own.

Doing the above would be so simple that a computer program wouldn't be needed. A minimum investment amount can be used to keep the trade sizes reasonable.

To keep a total allocation of lets say 60% stock and 40% cash

Put new cash where it is needed. But what happens when the formular tells you to own very little stock because stocks are near their highs? Maybe rebalance between the stock ACCOUNT (even though most of it will be cash) and the cash ACCOUNT (which will always be cash (or bonds).

I have no idea how the above would work. Maybe someone could test it. It was just a thought to have a simple investing system. As people come up with more complicated systems I always worry about data mining and the issues Aim Hier brought up.

Toofuzzy