A.I.M. Users Bulletin Board

[OldAIMGuy]

Welcome SFS,
I hope all your questions will be answered by various parties here. We also have a pretty good Q&A page here on I-Hub:
http://investorshub.advfn.com/AIM-%22In-Depth%22-Q&A-992/
and there will be several subjects addressed there that will interest you.

Three things to keep in mind as an investor and a fiduciary:
We invest for 1) price appreciation over time, 2) dividend capture over time and 3) profitable volatility capture over time. These are the goals of a well designed plan and are not mutually exclusive at all. Your overall goal is "total return" and the mix of the three will be what creates that.

A "growth" stock may fall more towards #1 where a mature dividend payer is gaining from #2 as well as #1. Both kinds of stocks (or ETFs) can benefit from #3 given enough time.

There are a few of us that used Merriman's "Ultimate Buy/Hold Strategy" as a basis of portfolio design. We looked for ETFs that generally matched the UBH model and populated the portfolio with those. Then we applied AIM to the individual components. This has worked well enough through many types of markets. Karw, renamed this portfolio "Ultimate Buy and AIM" or UBA.
Read more here: http://paulmerriman.com/the-ultimate-buy-and-hold-strategy/

1) The AIM-Hi variant is the same apple as regular AIM with the difference being a lower initial cash reserve and bigger bites being taken when trades occur (larger minimum trade size). The combination reduces trade frequency, gives a mathematical advantage to gains but magnifies losses by the same mathematics (Equity/Cash ratio) but also limits the number of buys that might occur since the cash level is lower.

Traditional AIM creates a hold zone of about +or- 15% from the starting point or roughly 30% LIFO gain between a buy and a sell. AIM-Hi increases that to nearly 40%. That's why the trade frequency drops.

4 & 5) Which is better? It's less AIM work to manage an entire portfolio in one AIM engine. However, since it is a volatility capture device, it needs volatility as a driving force. Using one AIM engine on an entire portfolio tends to dampen overall volatility (some holdings are up while some are down and are self cancelling). So, if you want the most capture, AIMing individual investments tends to do so.

That said, individual companies can prove to be almost too volatile and also involve "single stock risk." A good half way point is to AIM individual business sector ETFs. You get most of the amplitude of price range of the Sector but considerably reduce the "single stock risk." So company stocks have the highest frequency and amplitude of price change, Sector ETFs have good in this area and Diversified Mutual Funds are the lowest of the three categories. If you sleep well, then you can use investments with higher frequency and amplitude of price range. If you're a worrier, then pick from diversified mutual funds for your portfolio.

6) If you pre-calculate your "next buy/sell" target prices using the AIM Trade Price Calculator ( http://web.archive.org/web/20120609073103id_/http://www.aim-users.com/calculator.htm ) and ETFs or stocks, you can enter "Good Until Cancelled Limit Orders" on your holdings and then go mow the lawn. The orders will take care of themselves. All you'll need to do is report the trades when they occur back to your AIM spreadsheet(s). This keeps the effort to a minimum. The trades will occur when they occur rather than when you update your spreadsheets.

I hope this gets you off and running! Please feel free to ask questions as they arise.

Best regards,