Daily vs Weekly examinations
Hmm,
With all that is happening in the markets recently, I have to speak up. I am managing an account for a friend using AIM. The account has 5 stocks in it. All these stocks are managed using pure vanilla AIM, 10% SAFE, 5% min trade. These 5 stocks have accounted for over 125 trades since October 1 (trading costs are less than $5/trade). In most cases, a weekly update would have missed the spike in price (up or down). The attraction of GTC Limit orders is that when/if the price is met, your order executes. The downside is that more careful attention must be paid to your outstanding limit orders.
The issue for all of us is how much of our life do we want to devote to the market. What I am doing may not be suitable for everyone, particularly for those who have a full time job. I see AIM as the most powerful tool available to me, and I want to use it for maximum effect.
As the size of my and my client's portfolios grow, I recognize that my attitude may change. At some point, the portfolios will be large enough to sustain both myself and my client thru market downturns for the rest of our lives. Whether this figure is $2M, $6M, or some other figure, I don't know, and in reality, I won't know until I actually get somewhere close to one of these numbers. At this point, I may become MUCH more interested in fixed income than equities, and AIM could easily become a once a week, twice a month, or monthly look using market orders not limit orders. (look at the math, $2M @ 7%, yielding $140,000/yr - FNMA mortgages are currently offered at 7-7.5%, high grade 5-10 year corporate bonds are above 7%, and investment grade Preferred Securities are over 8%, numerous other examples abound - At $6M, 7% is $420,000/yr).
Robert |
