A.I.M. Users Bulletin Board

[OldAIMGuy]

Here at VIEW we've been nibbling on a few ETFs in the "Ultimate Buy and AIM" portfolio" (UBA). The UBA as many of you know was based upon the "Ultimate Buy and Hold Strategy" that gained some popularity back a decade or so ago. It came in various flavors and colors that could match nearly any size portfolio. Larger portfolios could be more greatly diversified by sub dividing the total into more and more individual pieces. (for more info, look at http://paulmerriman.com/the-ultimate-buy-hold-strategy-2014/ ) The main differences between my UBA and Merriman's UBH are that I use AIM and that requires a Cash Reserve. UBH has no cash in reserve.

In my own account I took some liberties and so it doesn't match entirely with the Paul Merriman model. He, also, has made some minor changes over the years like adding REITs, so I think there is some room for personalizing it. The main message of the UBH studies has been that sub dividing a portfolio into many sub components and spreading the $$$ around has given the portfolio excellent strength, somewhat lower Standard Deviation and improved overall long term performance.

All that said, my UBA retirement account suffered its first "down" year in a very long time in 2015. It was off 2.58% after all expenses for the calendar year.

                   History of UBA Retirement Account 
 Year      UBA Gain/Loss after Expenses   MorningStar "World Allocation" 
 2009               +46.07%                         +25.32% 
 2010               +14.79%                         +11.02% 
 2011               + 2.18%                         - 3.48% 
 2012               + 9.48%                         +10.14%   
 2013               +27.22%                         + 9.31% 
 2014               + 3.57%                         + 1.77% 
 2015               -2.58%                          - 4.68%

Being a diversified portfolio of both income and equity positions, it is hard to find an appropriate benchmark for it. Also, it is "global" in its diversification as well. Maybe the "World Allocation" index that MorningStar offers is a reasonable benchmark.

While my UBA retirement was around in 2008, it wasn't fully funded or properly allocated. It had a bad year like everyone else. It was nearly 100% invested and continued to reinvest all dividend distributions as long as there were AIM buy signals showing during that year and into the early part of 2009.

As of today the account is showing just over 33% of its holdings in Cash. That has been in place for a long time and has hurt overall performance to a degree. So, recent buying has shifted the underperforming Cash to better yielding ETFs of both income and equity flavors. Should the ETFs not do anything at all, the newly invested $$$ should at least earn a better yield.

My personal "market risk indicator" started 2015 in the middle of its Neutral range. It started 2016 just inside its Bullish range. Its long term history has been reasonable in accuracy over the calendar years where the years started in either the Bullish or Bearish ranges. Of the years since 1982 there have been nine each of years that started either bullish or bearish. The average performance when the year started bearish has been -1.8%. Of the years that started bullish the gains have been +22.8%. 4 of the 9 years that started bearish actually finished higher than they started. Just one of the nine bullish starts ended with that year down. So, in theory, we have a reasonable chance of 2016 ending well since it started in my risk indicator's bullish territory.

Here's to good AIMing in 2016!