A Post on Something That Might Turn Out to Be Nothing
I began last summer introducing the distribution of dividends at the end of each month. I only started referring to them as “dividends” after learning that copiers observed dividends coming from Macchia69 copies appearing in their available cash when I withdrew money from the portfolio. These were simply restitutions of the investment’s net growth, matching the copy’s performance over the full month that happened when I was withdrawing the said growth at the end of the month. I continued calling them dividends; it aligned with eToro’s description and accurately depicted the distribution of profits from the Macchia69 portfolio.
Why did I do it? I concluded that, having entered the PI program, maintaining $100,000 in the portfolio and using the monthly profit withdrawal, along with the PI remuneration, was sufficient for me to live on. The plan had both advantages and disadvantages, but overall, I deemed it a sound approach.
Advantages for me included: avoiding an excess of assets on the platform and securing a monthly revenue stream. The disadvantage was sacrificing the natural and compounded growth of the AUM (Assets Under Management), on which the PI remuneration is based.
Advantages for copiers: receiving money from the copy without risking position liquidation at a loss and enjoying a monthly revenue stream. The disadvantage was for those who preferred to leave the copy untouched and compound, as they needed to remember to reinvest the dividend money.
As you may have noticed, I used the past tense because, starting this month, the latest change in the rebalancing engine appears to have added an “unadvertised feature” to the process. My withdrawal of money no longer triggers a dividend for copiers but rather what was previously known as the “addition of money to the copy without copying open trades.”
The signs suggesting this change are:
Copiers did not receive a notification of a dividend.
The copy size did not change.
The size of new trades increased by a percentage very close to the monthly dividend.
Aside from potentially upsetting copiers who appreciated the previous “dividend” feature and pleasing those who disliked the task of reinvesting, the main problem lies in the lack of communication from those residing in the coding dungeons below the eToro headquarters.
If this situation is confirmed as a “feature” rather than a “bug” introduced during the release of the final iteration of the automatic allocation system, we face a small problem. As my copiers know, the only positions that remain open in the portfolio are those with a negative balance. While advantageous on entry, this poses a challenge on exit. The withdrawal/restitution/dividend strategy was implemented to address this issue, providing a risk-free method of extracting money from the copy.
As mentioned in the website FAQ, which may require minor amendments if these changes are permanent, the preferable method to extract money from the copy becomes a waiting game. Waiting for the $UK100 to approach as close as possible to the midpoint on the strategy (currently 7600) and accepting a slight financial hit, as fractional sales of positions in the red are inevitable in a balanced portfolio.
Let’s wait and see 🤔
To close on a positive note, I received the certificate in the picture from eToro. Despite the rough seas, my portfolio, and consequently your copy, is heading in the right direction, let’s cheer on that.
