Replies to post #49 on The "Stock Trading Riches" Investment Sy

[AIMster]

So, with STR, you can account for growth at the individual stock level by increasing constant value, or at the portfolio level by adding positions with excess cash, or both.

Praveen,

One part of your "system" that I find most useful is the adaptability. I also like the simplicity of keeping positions at the same constant value, less work than some at this level, others at that level, and so on. As I'm still in the working world and adding cash, one could grow the lot to a new constant value by not taking some profit when you would normally, and use the added in cash to bring the laggards up to the new level, and go from there.

Best,

AIMster

[AIMster]

Since the basic STR system is to rebalance annually on at least a 10% move, that means that, at most, we will have 1 trade for each $2000 in the account. 7/2000 = 0.35% expense ratio. I think that is low for a managed fund - which is what I consider my portfolio to be.

But, since you're not selling the whole $2000 to rebalance, rather just the 10% difference ($200), isn't the expense more correctly figured out as 7/200 or 3.5% of the actual trade? Still not bad, given the annual frequency, but perhaps just two ways of looking at the same thing.