Value Microcaps Portfolio

[Frank_Value]

Thanks SSK for tracking VMI. Here I want to share with everyone a brokerage that might be helpful in implementing this index in a cost-effective way:

http://www.folioinvesting.com

How it works:

You pay a monthly ($29/m) or yearly ($290/y) subscription fee and your trades will be executed only at 11am and 2pm for free. They call these two available slots as "trading windows". For example, you can create a "folio" that contains the 100 VMI stocks (*limitations here as discussed later*). Then you can invest $1000 in this folio. The system will automatically divide $1000 into 100 stocks (according to the weights you specified for each stock; let's assume equal weight at the moment) and execute your order at next available 11am or 2pm window for free. This scenario will be very costly to implement at any other brokerage.

The advantages:
1. Very suitable for managing a large group of stocks, an index such as VMI, with a very low cost, especially if you only want to invest a small amount of money.
2. Very suitable for mid/long term investment that does not care about daily price fluctuations.
3. You have the option to place direct trades that are sent to the market immediately (regular market/limit/stop orders) if you don't like the window trade. Each direct trade is only $3.
4. A lot of other benefits, but I won't enumerate here. Go to the website to learn more if you are interested.

Limitations:
1. The platform does not support OTCBB and PK stocks. Out of the 100 VMI stocks, only 65 stocks can be traded using the above window trading. This is the most significant limitation to manage VMI using this platform.
2. The displayed quotes are delayed quotes. (Real time quotes are used for executions though.)

Disclaimer: This is not an ad and I will not post it again. The listed advantages and limitations are my personal opinion only. Its sole purpose is for information sharing.