|
FAQs - HOW DO I FOLLOW THE iDayo™ SYSTEM WHEN I BUY AND SELL MY STOCKS?
Go to www.iDayo.com and click MEMBER LOGIN.
After you enter your User Name, you will be taken to your Member Area. (This is
a private, Members-Only Website within the public website.) As you scroll down the page, the current
'open' folios are listed. A folio is the name given to any group of stocks
recommended by the Selector in any given week. An 'open' folio is one in which
the stocks are still being held by our Members. Once the stocks reach the 16th
week, they are sold, and now considered to be 'closed' folios. You can view all
the closed folios back to 1998 by choosing 'closed' from the drop-down menu.
When you log in on Tuesday morning, you will look at the list of open folios to
see if there is a new folio for this week. Just click on the folio to see the
new stocks that have been posted. There will normally be 3-5 stocks.
Now you need to determine how
many shares of each stock you want to buy. We suggest placing 2.5% of your
portfolio in each stock. This will ensure you will have enough money to buy ALL
the Selections over the 16 weeks. (You will hold an average of 30 - 40 stocks
at any given time). Assuming a total portfolio of $20,000 that will be used to
invest in our Selections, you would invest $500 (2.5% of $20,000) in each
stock. Then you will divide $500 by the current price of the stock. (The closing
price of the last trading day is listed in the Member Area as a guide.) When
you've done this for each stock, you'll have the data you need to go to your
broker with: stock symbol and number of shares. If you are using an online
discount broker you can then place your order.
We have greatly simplified
the process of determining how many shares of each stock to purchase by
providing a Portfolio Calculator in your Member Area. You will simply enter the
total value of your stock portfolio (including cash and stocks you already
own). The Calculator will divide the 2.5% of your account value that is
allocated for buying each stock by the price of each stock, and report how many
shares of each you should buy.
The broker will want to know
if you are placing a Market Order or a Limit Order. What is the difference? A
Market Order means 'buy the stock right now, at the market price'. You may get
the current price, or you may pay less or more. But you WILL get the stock. I
use a Market Order because I am not a day trader. I want to own ALL the stocks
selected, and I don’t want to take a chance on missing one of them to save a
few pennies. A limit order is where you say, "I want to buy XYZ stock at
or below $10.75 per share". You may save a few cents, but you may not get
the stock at all.
The broker will also want to
know how long you want your order to be in force if you use a Limit Order. (If
you place a Market Order this is immaterial, as you will be filled right away.)
You should choose GTC (Good ‘Til Cancelled), which simply means to keep the
order on the books until you cancel it. If you don’t choose GTC, your order
will only be good for the day on which you placed it (a Day Order). If you do
not get filled on the order within a few days, you should consider changing the
limit price so that you don’t miss out on purchasing any of the Selected
stocks.
When you contact your broker, you tell them (either on line or by telephone)
five things:
- I want to BUY;
- The stock I am buying is XYZ;
- I want ## shares;
- I want this order to be Good ‘Til Cancelled;
- I am placing this as a Market (or a Limit) Order.
You will do this for each stock. As soon as you own all the stocks (a matter of
60 seconds or so), you should enter a STOP order to sell each stock. This is
your downside protection. For example, if the stock is currently at $25, you
should sell if it ever reaches $20. The way a STOP order works is that if the
stock drops to $20, it automatically triggers a MARKET order. That means you
will sell for around $20, but it could be less or it could be more. We suggest
that you not use a STOP LIMIT order. If it is time to sell, it is time to sell.
Don’t try to squeeze a few extra pennies out of the order by limiting the price
at which you will sell. It’s not worth taking the risk that the stock may drop
below your limit price, and keep going down. With a STOP order you WILL sell the stock, but you don’t know in advance
exactly the price you will receive. With a STOP LIMIT order, you MAY sell at a
certain price, but the stock could go much lower.
By setting stops for each stock you just bought,
you're protecting yourself in the event a) we're wrong, b) the company
announces some disaster, or c) the market moves down over the 16 weeks and the
stock goes down 20%. The only other thing the broker will want to know is how
long your order is good for. You should choose GTC (Good ‘Til Cancelled). Make
sure you ask your broker if they have a time limit on GTC orders. If they do,
you will need to renew your stop orders when they expire.
Now, you're done for the week. Next week you'll repeat the same process. If you
don't end up buying until late on the day the stocks are posted, or sometime
the next day, or even later in the week, it is not a problem. This is a 4-month
investment, not a one-day trade. One or two days haven't been shown to make a
difference.
As soon as you own all the stocks (a matter of 60 seconds or so), you should
enter a 20% STOP order to sell each stock. This is your downside protection.
For example, if the stock is currently at $25, you should sell if it ever
reaches $20. By setting stops for each stock you just bought, you're protecting
yourself in the event that: a) we're wrong; b) the company announces some
disaster; or c) the market drops dramatically over the 16 weeks and the stock
goes down 20%.
Now, you're done for the week. Next week (and every week thereafter, except on
weeks where there are no Selections) you will repeat the same process. If you
don't end up buying until late on the day the stocks are posted, or sometime
the next day, or even later in the week, it is not a problem. This is a 4-month
investment, not a one-day trade. One or two days haven't been shown to make a
difference.
After a few months, assuming profitability, you'll want to re-evaluate your
portfolio, and see whether or not you need to increase your purchase size. For
example, let's say your portfolio is now up to $25,000; instead of buying $500
worth of each stock, you'll want to buy $625 worth. By doing this you will
compound your returns and advance the speed at which the money will grow.
|
|
.
-1.22
0.07
Subscribe Now!