[Dave K.]

A counter balance would be best, and you still might want to couple that with a position sensor, such as a potentiometer, and a closed loop position control system. Given that your arm wants to sink to the ground, the control loop would cause apply enough energy to counteract that force and essentially keep the motor stalled to hold the arm in place. This may result in excessive heating of the motor, and subsequent failure.

If you could balance the arm AND provide a closed loop control of the arms position, then it would easily maintain position.