for me, the verbiage in a string of posts is confusing, so I asked Doc to send me the condensed rules. even more helpful is constructing a spreadsheet that evaluates actual share prices. by actually translating the rules to cell formulas, you can see exactly what is being described by the text. some things:
1. it keeps you out of the market for some days on either side of the ex-dividend insanity.
2. it spots an up trend fairly quickly.
3. it confirms the trend as a real trend, not just a blip, before you make the buy.
4. it is entirely possible to NOT get a buy signal.
5. it is aiming for capturing the dividend as a cap gain rather than ordinary income. short term gain, but still capital, which might have different tax treatment.
6. all of the "sweet six" are monthly payers.
7. most of the SS are not constantly releasing "news" to the press.
8. most are very high yield, allowing you to cover your trade costs with just a few shares.
9. most perform successfully month to month, even though the longer term trend is down.
10. this is a form of technical analysis that does not require massive amounts of data.
if you are going to do this
1. discipline yourself to understand just what it is you are doing.
2. discipline yourself to only respond to the signals, and leave your "gut" out of it.
3. discipline yourself to not bet the farm on any one stock or method.
Yahoo Finance has enough information to back check the method for nearly any listed stock. I suggest that you try that first.
One of my son is a software engineer and he put together a program for me which allows optimization for entry, exits and stops. Going back to the bad times of 2008 I wanted to see what the highest percent stops would be to still allow exit for catastrophic months , and therefore allow potential winners to run and not be stopped out. It is a dance.
The complication arises when volatility changes, which I have written about before. The higher the volatility, the more variance between high and low and the greater potential of being stopped out on simple fluctuation of the PPS during any given day.
I am still working and will let you know what stop I am changing to. It will no longer be 2.5%. It will probably be 7%. Working.....
Well said MrWizard!!
A point for clarification:
"most are very high yield, allowing you to cover your trade costs with just a few shares"
We do not ever collect the dividend with the Glad/1.5% model. Further, as you state on point 9) "the longer term trend is down.", therefore it would be to our disadvantage to hold any shares into the next cycle, so what did you mean by "allowing you to cover your trade costs"?
Thank you for the great post...;-)
what I meant is that we are capturing the dividend via the monthly cycle, and the dividend we are capturing as a CG is mostly enough to cover trading costs. in my TD IRA account, an in-out cycle is about $20 for any number of shares. easy to recoup with a 17% yielder.
Mrwizard one more rule. With a SPO on a Monthly DONT overbuy it will not nescssarlly be the best price of the cycle. Example FSC for April. I would like a copy of your spreadsheet to mr.phil2u@yahoo. Thank you
my sheet is an OpenOfficeCalc sheet. currently it is optimized for copy-paste price data from Yahoo Finance historical prices for back checking. OpenOffice is as versatile as MS Office and free. it also can read/save MS Office formats.
if I can get it into really decent shape, I will send it to you and maxbids.
Hang in there Janet, the over-riding principles are the same. I am just gradually refining the rough edges and retiring less qualified players to the bench and adding some all stars in replacement.
Have you ever danced? I like to lead and create a few variable steps as I do so...it still remains the Tango. I especially enjoy the Argentine Tango, for this very reason of variance with my long legged female partner wrapping those stiletto heels around my legs. The Bandoneón plays in that quadruple meter, in the background as she leans towards me thrusting her knee between my legs, barely brushing my trousers...There is nothing quite like it....almost as good as becoming independently wealthy trading Glad/1.5%.....;-)