R. Clayton (rclayton@clayton.cs.monmouth.edu)
(no date)
Here you are saying that at least one of the portfolio percentages has to be
within plus or minus of your ideal percentage(50, 30, 20).
Ah, I see I wasn't clear enough. What I should have written was
All the final portfolio percentages have to be within plus or minus one of
the percentages that minimize the difference between the the actual and
ideal portfolio percentages.
But neither of the examples given in the output section satisfy this criteria.
I've added a disclaimer to the end of the output-section example that you
should probably read. However, in general, it will not be possible to
maintain a portfolio at the ideal 50-30-20 percentages because stock prices
change independently of one another. Understanding this, the important
question is "does the portfolio come as close to ideal as possible given the
particular investment strategy?"
It is true that the example portfolios aren't very good with respect to the
ideal percentages, but it could also be true that these portfolios are the
best you can do to minimize the difference between the actual and ideal
percentages given the two investment strategies used.
So far my understanding of the problem that for simple strategy
if x, y, z are the percentages of X, Y, Z.
1. 49<=x<=51 or 29<=y<=31 or 19<=z<=21
2. x+y+z=100
3. %x of total value <=1250 and %y of total value<=750 and %z of total
value<=500
I believe you're confusing the criteria I've placed on the final portfolio
value with the criteria for buying stocks. Strategy S is simple because it
has nothing to do with portfolio value; it just buys stocks blindly based on
current share price, ideal percentages, and the monthly amount.
This archive was generated by hypermail 2.0b3 on Fri May 10 2002 - 12:45:04 EDT