A.I.M. Users Bulletin Board

[SFSecurity]

Hi Ray, I welcome you chiming in. It helps to get a variety of perspectives.

By AIM-HI I'm guessing that you mean 80% stock, 20% cash, right? If so, that is what I'm doing with my AIM positions by default.

Interestingly enough in looking in the 3rd edition of AIM (Still can't find my 4th) for AIM-HI and came across the following on page 248:

...error lay in assuming AIM could perform the entire job for them all alone and that the fuel itself - the choice of a stock or mutual fund - was of minor consequence. Nothing could be further from the truth.

Lichello continues in the same vein so it is clear that we need to pay close attention to the "fuel."

In another vein, on pages 64-70 where Lichello does the comparison between AIM (Old 50/50 version) and Buy and Pray, it is worth noting that he has almost two full cycles per year. I take this to mean that to be truly successful we need to follow that example and find positions that have volatility. Lichello says as much on page 215.

On page 249 (3rd edition) he examines a chart sent to him where the person had only gotten a 10% gain in two years because the fund had started at ~$10 and ended the two year period at ~$10.50, only about 5% different. Lichello then goes on to say:

Comatose but not terminal: AIM couldn't care less about the performance of a mutual fund so long as the price fluctuates.

He then goes on to say that his chart (pgs 64-70) has extreme volatility and we can not expect that in the real world.

Another point is that he goes on to discuss how to select a fund, rather than a stock so I'd guess that if he were selecting positions today ETFs would be high on the list to examine, both because of their diversity and because of their very low expense ratio.

Anyway, enough for now.

Best,

Allen