A.I.M. Users Bulletin Board

[karw]

Constant value..

Assume N funds with SV1, SV2 ... SVN. (SV = stock value)

Then CV = Sum(SV(i))/ N

Using similar mechanisms as in standard AIM: safe(0.1) and transaction value(0.05):
when a SV > CV + 0.15*CV then sell 0.05*CV
when a SV < CV - 0.15*CV then buy 0.05*CV

Lets assume that Cash (or ST bonds(SHY)) is part of this portfolio then the proceeds of any Sell can go into cash and every Buy is taken from cash. In this way Selling and Buying is not happening at the same time but asynchronously(while in PP we do it synchronously).

Re-balancing is automatic and part of the algorithm.

The above assumes that Cash is a certain SV.

You can also take Cash outside the portfolio and not use in the CV calculation, In that way Cash could become more dynamic.

Kind Regards,K