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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (9411)	11/30/1999 4:44:00 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18927

Hi Keith, I have done some more thinking on this Percent of Assets type of accounts that several brokerages are offering..... First, my average cost of all my annual trades is just under 1%. However, I rarely trade much more than about 25% of my inventory. So, that 1% spread out over my total portfolio value really is diluted to being just 0.25% parasitic loss. While my account is sitting in a flat market, my parasitic loss goes down as my trading activity goes down. However, if I were to trade my account more heavily, my parasitic losses rise. It would take a 100% inventory turn in my account to bring the costs up to where some of the houses are charging. This isn't an "unreasonable" inventory turn, in that the average mutual fund turns over their entire inventory on a percentage basis yearly. However, it's been my long term experience with AIM that I average only 25% to 30% inventory turns per year with my "style" of stock selection and long term goals. It would be interesting to hear from some of the other AIMers that have over a year's worth of data accumulated to see if their inventory turns are similar. In this case, I take the total value of the stocks I've sold for the year from my tax forms and divide it by the total value of my portfolio at the year's end. This is how I approximate the inventory turns. Interesting food for thought. Best regards, Tom PS: Keith Felkins - anagram IF THE ELK SINK FISH LIKE KENT SEEK INK FILTH