- Buy in above my established buy price - 25% of funds
- Buy in at established buy price - 50% of funds
- Buy in at bargain prices below my established buy price - 25% of funds
This gives me a viable strategy for most markets:
- Bull Market - I will buy in at higher prices than I typically would, but I would have a maximum of 25% exposure and I would continue to gain some thin profits as long as the market stays positive.
- Up and down market - I would buy in at 25% and a high price and up to 50% at my standard price. I would then invest a maximum of 75% and receive my expected profit for most of these purchases, but some would be thin profits.
- Bear Market - I would continue to buy in as the market slides below my target price range and get bargain prices on 25% of my investments, while 50% would be bought at standard price and 25% would be bought at premium price. On average, I would get my standard profit on 100% of my funds although this might require and extended holding period. But since I'm averaging 8% profit on each flip, this is a respectable return, even if the bear market would last a full year. Plus, dividend income would be significant during a long holding period.
- Flat Market - As noted in previous post, volatility is important for my strategy. So a totally flat market offers few buying or selling opportunities, so this would be a bad scenario if I'm minimally invested. But even this would be acceptable if I'm able to collect dividends on invested funds.
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