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Hello DB,

Since no one else has commented I'll add what I can.

I don't think the Magic Formula has been tested with longer than 1 year holding periods. In my experience quite a few of the stocks move off the list quickly as prices improve or other quality companies take price hits for whatever reasons. One reason I'm tracking with TrackMagicFormul is to show what a short-term strategy would do by dropping stocks after as soon as one week if they fall off the list.

I've only been tracking for two months, but already some top scores came and went quickly. For example,BDSI was bought on 11/14/12 at $4.22 and sold 11/23/2012 @ $4.85 for +12.82. Now it has sold down to $3.98, so without the quick sale it would be a loser (so far).

In terms of lowering your cost to invest, I use WellsFargo which has free trades. I understand Bank of America does the same.

Good luck!
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