Bruce,
Thanks for the great info. Here is the plan I am working now:
I have a list of 100 or so good fundamental quality stocks I got from a "value
investor" type book's website as the start point. Then I remove the highest P/E
stocks from that list.(which should take in lots of tom's tips (low P/E, Dept,
etc.). I was trying a bunch of different volatility indicators but the
Zig-Zag looks best (knew I'd get to use zig-zags someday :)). Set ZZ % to 25 in
my chart package, yet i still keep PCA "Resistance" setting at the default
10.... I think the ZZ @ 25 and Resistance 10 are the key messages, right?

So I take the top 10 ZZ'ers or from the list and place a GTC order in the
quantity specified (TBD).
Now to change my "share allocation" to 20K, this is updated in the
Portfolio>Equity Manager>Position Management Setting's "Beginning Cash" box ,
correct?
Thanks
Jim

----- Original Message ----
From: Bruce Bowman <bruce@...>
To: positioncostaveraging@yahoogroups.com
Sent: Sunday, April 6, 2008 7:39:11 PM
Subject: Re: [Position Cost Averaging] Ideal process for starting with new
account from scratch

Your 5% allocation may be a limiting problem. While it gives you
diversification, it comes at a cost of requiring very small trade size
which in turn increases the impact of trading cost. Alternately, if you
increase trade size, now you have to see a very large market move to
trigger a trade.

I try to use a minimum investment of $10,000 in the equity which
produces a better trading environment. Plus cash, of course. If you're
using 50%/50% allocation, that means you have $20,000 tied up in each
investment or 5 equities.

That said, the current market valuation (taken in a long term
perspective) is very oversold at the moment, so 50% cash may be
overkill. Cash reserve is necessary to be able to buy all the way to the
bottom, but having $$$ left over when selling starts reduces your yield.
Ideally you want Cash = $0 at the bottom which will give you the best
return on your captial at risk.

If you are still accumulating investment capital and you don't like
being limited to only 5 equities, you can consider using the TwinVest
strategy that Lichello talks about.

Don't forget to consider using ETFs for AIM. These are usually in the
form of closed-end funds that specialize in a certain market sector. For
instance IJS uses the S&P Small Cap equities and tends to be very
volatile. On the other hand, IYH (healthcare) tends to be way less
volatile and will require a great deal of patience. AIM works with
volatility; beta > 1.4 or more is a pretty good measure.

Tom Veale has a very helpful site ($0) for understanding AIM and also
some improvements to gain better yields. Unfortunately Tom has signed an
agreement with an investment group that requires he not display his
Idiot Wave any longer (it's part of the intellectual property and is
Tom's creation) which had been an excellent guide for establishing the
starting cash reserve.

Bruce

----- Original Message -----
From: "jbratton33" <jbratton33@yahoo. com>
To: <positioncostaveragi ng@yahoogroups. com>
Sent: Sunday, April 06, 2008 3:32 PM
Subject: [Position Cost Averaging] Ideal process for starting with new
account from scratch

> Lets say I start with a brokerage account of $100K in cash. I have
> allocated 5% max($5,000)per symbol. I also have selected some stocks
> I want to invest in.
>
> Now what is the OPTIMUM process to then take advantage of all PCA has
> to offer?
>
>
> ------------ --------- --------- ------
>
> Yahoo! Groups Links
>
>
>
>




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