How do I manage the allocations of money to the recommended positions?
With each new set of ETF recommendations, we specify how many ETFs to hold. Let’s say the last recommendation is to hold 3 positions. The idea is that one would initially invest equal dollar amounts in each of the 3 ETFs. Then, maybe the next recommendation is to replace only one of the ETFs with a different ETF. The easiest way to do this is to sell the holding in the ETF being dropped and buy the new ETF with the receipt from the sell. That, of course, will result in each of the 3 positions being held with slightly different amounts of money. But as long as they are roughly in the same proportion it is ok and after all, it saves you money on commissions to not trade all holdings just to have an exactly equal balance. On the other hand, it is a good idea to check the percent holdings every few months and rebalance when they depart significantly from an equal amount. It’s not something that needs to be done very often.
