Hi Ray, Thanks for the review of Core Position type management. It and AIM have many things in common. Zero SAFE and no bump up in Portfolio Control is essentially how this functions.
The good news is there is some volatility capture. The bad news is that the LIFO is smaller. However if standard AIM can't do any volatility capture, then it is the same as investing like Mr. Buynhold.
On primarily income producing investments I find AIM-Hi with lower total SAFE value works nicely. Since we own these things for income, we don't like to sell them anyway. With such things, I usually use the 20% cash starting point as also being the maximum. (some I use 30% and some I use 15%) Something like TLT doesn't offer very many trading opportunities so when they occur, having a higher minimum trade size is nice. We don't bite very often, but we take bigger bites when they occur.
It is my opinion that the LIFO gain on a Sell of an income investment should work toward paying for the lower income of the cash while it is set aside. So, if we were being paid 1% on Cash and 5% on the investment, the LIFO gain should compensate us for the "Time Value" for while the cash is dormant. If the LIFO were 15%, then the cash could sit for something over 3 years with essentially no loss in time-value.
TLT has moved from around $90 up to $128 some years ago and then down to around $103 in late 2013 and now back to over $130. These aren't huge moves, but certainly worth trimming and backfilling for some gains. Since 2013 the yield has improved from under 3% to now being over 3.5% as the portfolio has internally been freshened.
Thanks for bringing up AIM's cousin and how it is both similar and different.
AI
