To the Editors:
For the Model Shadow Stock Portfolio, you recommend entering limit buy orders at the ask price and limit sell orders at the bid price. [See the April 2010 AAII Journal or the Model Portfolios area of AAII.com for the portfolio rules.]
I would think it’s best to buy low and sell high. Therefore, wouldn’t it be better to enter buy orders at a small discount from the present bid price and a sell order at a small (0.5%) amount above the present ask price? This applies if the difference between bid and ask is less than 2%.
James Cloonan Responds:
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