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Hi Steve,
Just sent my email to you for a copy of that, Thanks, Ken
fbrd400 at frontier dot com...
Added MPW to my portfolio today.
Toofuzzy
Re adjusting / form fitting AIM settings.
On stock charts.com one of the screens is ZIG ZAG. You can adjust that to see where you might get trades.
Unfortunately as they say , past results don't predict future results.
Toofuzzy
We cannot rely on the past to determine the future. It may however offer an indication.
I have a sharepad subscription from which I can download a complete share price history for a chosen fund or share. You mention that you have software, would it accept a csv file? Is it available somewhere?
Thanks.
Will
Looks to me like you're intent on net accumulation. All well and good as far as that goes. But AIM by itself tends to accumulate even with balanced Safe settings. Especially with a 'Steady Eddie' mutual fund. So I would caution that you should expect relatively frequent Buys and could likely put your Cash Reserve at risk without some type of 'Pump the Brakes' methodology such as 30 days between sequential buys, or Tom's 'Halfway to the Wall' method of protecting Cash Reserve.
I am definitely aiming for accumulation at this point in my life. Having been interested in investments for the last 40+ years I am more of a Steady Eddie nowadays. The make money quickly never worked for me. Currently trying to exploit the benefits of compounding.
I am also trying to simplify my investments and systems. Something I hope to be able to pass on to my children enabling them to do the same. They currently have little desire in this regard.
To this effect I currently use a momentum system that trades monthly. Based around the work of Meb Faber and his Global Tactical Asset Allocation Focus 3. As previously mentioned having recently read J L Collins "The simple path to wealth" I have allocated a portion of my investments to "Fidelity Index World Fund P Accumulation" fund. The premise from the book is to Buy and Hold and ignore drawdowns. Unfortunately I don't have the stomach for that, hence finally reading about AIM and adapting my strategy accordingly.
Advanced Automatic Investor board has had only one post in the last few years.
Re: Sell on PLTR, Buy on SLV
Yesterday at the open, PLTR and SLV triggered my next Sell and Buy prices respectively.
My GTC Sell order on PLTR filled near the open @ $9.30 / Shr for a very nice 25% LIFO gain on shares purchased last September.
I do not use GTC orders on the Buy side and actually didn't see the SLV notification until last night.
So I took a look this morning and was able to to make my Buy for 11 cents less per Shr than my I would have with a standing Limit order.
Sometimes I get Lucky!
Hi Will.
Didn't realize you were across the pond.
It will be interesting to see how my settings work in practice.
8% Sell SAFE and 0%Buy SAFE for a very steady mutual fund.
Looks to me like you're intent on net accumulation. All well and good as far as that goes. But AIM by itself tends to accumulate even with balanced Safe settings. Especially with a 'Steady Eddie' mutual fund. So I would caution that you should expect relatively frequent Buys and could likely put your Cash Reserve at risk without some type of 'Pump the Brakes' methodology such as 30 days between sequential buys, or Tom's 'Halfway to the Wall' method of protecting Cash Reserve.
I wonder if there has been any software developed to optimise the settings based on a backtest?
Oh Yes!
Mark Hing out of Vancouver introduced us to Automatic Investor back in 2000 at our AIM gathering in Vegas. He quickly built an actual business with his suite of software!
He also has an active A.I.M. board out here.
https://investorshub.advfn.com/Advanced-Automatic-Investor-1172
Also, 2 other fellows from back then (names escape me at the moment) from Fernandina Beach on Amelia Island, Florida developed a pretty big business with their version of AIM.
Both of the software packages had some types of optimization built in.
Has anyone suggested volatility as a filter to select stocks / funds?
Absolutely. Hard to find really high Vix in mutual funds or ETFs unless you use leveraged ones.
But that can be a double edge sword because there is always a reason that a stock or fund is relatively volatile. Sometimes OK, sometimes not.
Definition from Google: Volatility is how much and how quickly prices move over a given span of time. In the stock market, increased volatility is often a sign of fear and uncertainty.
Finally, if you want to study AIM in depth, start here:
http://web.archive.org/web/20120830055133id_/http://www.aim-users.com/index.html
The FAQS section is very informative,, and you may find most of your questions already covered.
Different time zones.
It's already mid day here (UK). It will be interesting to see how my settings work in practice.
8% Sell SAFE and 0%Buy SAFE for a very steady mutual fund.
I wonder if there has been any software developed to optimise the settings based on a backtest?
Has anyone suggested volatility as a filter to select stocks / funds?
Just a few musings
Will:
Your 1st request actually did come into my primary folder.
But since you sent it at 3:56 AM, it was Waaaaay down the list.
I did send the Excel sheet just now, so let me know if you have any questions.
BTW:
It was fun for me to read through my approach and play with it again.
Took me back to 2003 when I spent many of a lunch hour with paper, pencil and calculator figuring out how to 'reverse engineer' Lichello's simple subtraction approach and still accommodate Safe, Min % and Min $ settings.
So thanks for asking your original question.
Hi Steve,
Yes please thank you. I sent an email request this morning. Perhaps it's in your spam folder.
Thanks Will
Hi again Will.
Would you like a copy of the Excel hold zone sheet I described?
If so, just send me an email.
Thanks, Steve
Hold Zone
Many thanks to everyone that replied.
You've all been very helpful.
Will
Hi Will
Re: Hold Zone Calcs
I took a page from my LD AIM Excel Sheet and made up a workbook with it which explain the various formulae in each cell which I 'reverse engineered' from standard Lichello calcs.
Basically a step by step calc as if you were doing it with a hand calculator; only it's done for you!
The Hold Zone is the next price and quantity to Sell or Buy based on your settings.
Current Price is not needed if you're predicting the next transaction on either side, which this simple sheet does.
If you want it, drop me an email to
biggrabbergrabber@gmail.com.
This is an older snap of it.
Good Morning Jon.
Regarding AGQ:
I didn't know that AGQ existed.
But now in looking at it briefly, I'm likely to stay away because it's leveraged.
Had a great runup post financial crisis, and held for a while, but note the 1:4 reverse split in 2014. Has been kind of steady to trending down, albeit volatile enough since then.
Probably a Contango issue like I had with VIXY that Toof pointed out to me a while back.
Thanks for the idea though!
Have a great day!
Re: Hold Zone
Hi, Will
Check the following posts for calculating the AIM Hold Zone:
a) post #8299
[url][/url][tag]https://investorshub.advfn.com/boards/read_msg.aspx?message_id=1048218[/tag]
b) post #37762
[url][/url][tag]https://investorshub.advfn.com/boards/read_msg.aspx?message_id=102909769[/tag]
b) post #43825
[url][/url][tag]https://investorshub.advfn.com/boards/read_msg.aspx?message_id=150410241[/tag]
post #43825 is continued in post #43830
[url][/url][tag]https://investorshub.advfn.com/boards/read_msg.aspx?message_id=150418196[/tag]
c) post #44220
[url][/url][tag]https://investorshub.advfn.com/boards/read_msg.aspx?message_id=153973200[/tag]
In this post Tom pastes the link to the TooFuzzy's Quick AIM Calculator, by viewing the web page HTML Source Code (Right-click a blank part of the web page and select "View page source" option from the pop-up menu that appears) you could find the formulae that were used for the calculator.
d) post# 44490
[url][/url][tag]https://investorshub.advfn.com/boards/read_msg.aspx?message_id=155952116[/tag]
You can find in this post Tom's and Torre's formulae for target price
I hope this helps!!!!
Best regards,
Pedro
Hold Zone.
Hi Will.
I am probably using the same base spreadsheet except I have adapted it to include "virtual shares" - so the columns will not match up to yours. I take trades as they come and do not wait for the monthly reviews. But you have to be prepared for quicker and perhaps deeper drawdowns. Sometimes this is not easy to do.
I can't remember who shared the following formulas on this forum. But they are what I use:
Next Buy = (Portfolio Control - Min Buy$) / ( Total Shares X (1+ Buy Safe% / 100 ))
Next Sell = (Portfolio Control + Min Sell$) / ( Total Shares X (1 + Sell Safe% / 100 ))
Hopefully somebody with more AIM experience can double-check to see if these are correct.
All the best,
old john
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of February 17th
_________________________
Short Term (18 Months)
Individual Stocks: 55% (Up 8 from previous week)
Diversified Mutual Funds
or Portfolio: 37% (Up 5 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 46% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 31% (Unchanged from previous week)
Oscillator: 2.28 (Down .19 from previous week)
*See posts #44585 and #44588 for Tom's explanation
Spreadsheet Suggestions
I've currently downloaded the Aimbares Spreadsheet, I had an older one from many years ago that had a hold zone.
I'm finding it difficult to create a holdzone similar to the webpage. Is there an updated spreadsheet anywhere?
My aim (pardon the pun) is to trade based on the holdzone and not on a monthly basis. Is that what others are doing?
Thanks.
Will
I'll be unavailable for a while.
Please keep the markets happy in my absence.
OAG Tom
Hi Steve..
Since you have a portion of your portfolio in SLV, have you ever considered AIMing AGQ?
Just curious. ;o)
Take care.
Jon
Hi Will
After 2000 the market sank and didn't really fully recover till 2013.
But if you were using AIM from 1995 you would have built up a sizable cash reserve to take advantage of the drop and recovered much sooner.
I use WPM as my gold / silver proxy. I do AIM it and have done well.
Toofuzzy
Hi Will.
Regarding using AIM with GOLD...
I've been AIM-ing SLV for almost 10 years.
Currently it is my largest holding.
Look at Post # 46288
Good luck and welcome to the crew!
Good Morning Crew!
Wanted to report that I was able to get my first Sell executed on AMZN.
AMZN is my newest LD-AIM program, started in September last year.
I had been anticipating their 20:1 split since it was announced early last year, and even though I didn't buy in until a few months later, I did get in at $120 which was lower than the close on the June 6th split date (albeit not as low as it fell a few months after the split and before I got in).
Since then, I had 3 consecutive Buys with my first Sell on 2/2.realizing an 18.7% LIFO gain.
And amazingly enough I got a Buy 5 days later, replacing those shares plus a few at a discount of 10.1%.
Currently, my Actual shares are worth 7% less than they cost, but the stock is down 17% from my initial position.
It's a great example of how quickly AIM reduces average cost.
Good morning.
I'm quite happy with my momentum portfolio, so that will be left as is.
I am however looking to apply AIM to my "simple path to wealth" fund. Namely: Fidelity Index World Fund P Accumulation as a separate portfolio.
I can see the logic as outlined by J L Collins in simply buying and holding an index tracker. A decade or longer of being underwater is unliveable in reality. Here I think AIM will have a valuable part to play. I felt a resonance when I was reading the Lichello book.
I also plan using AIM with my Gold holding - is this feasible? My small holding is with Bullionvault which offers an easy exchange for trading.
I'm likely to have plenty of questions regarding settings over the coming days / weeks.
Thanks for reading.
Will
You can use AIM or use momentum investing and both will make money but you can NOT use both together.
Not always
Toofuzzy
“Now I know the key to making a profit is buying when the stock is at a low price point instead of just buying and ‘hoping’ that I will make a gain from it.”
I saw this quote this AM and thought about how much this guy would have enjoyed using AIM had he known about it. Here's the article:
https://www.marketwatch.com/story/ok-snowflake-how-to-retire-rich-evenif-you-just-got-wiped-out-11675782929?mod=home-page
Best wishes,
OAG
Hi Tom,
Starting to look through this website, downloaded the Aimbarebones spreadsheet only to realise I had one from my previous flirting with AIM. The current one doesn't provide a hold zone. Was there a reason why this is not included?
Thanks.
Will
Good morning Will,
AIM proves to be proactive during both good and bad markets. Flat markets are just times to show patience and AIM is on vacation. Then, the structure of the portfolio, not AIM, is in charge. In my early days of AIMing I studied and invested in lots of chip and tech based companies as they showed high frequency and amplitude in price changes. Those tended to fuel the AIM engine very well. However, during more flattish markets, they did little to keep Total Return moving.
Over the years my portfolio has become less aggressive and more bent on total return through all markets. I did some studies back around 2000 with reasonable dividend payers that also had some growth potential. My attempt was to learn if such stocks could compete on total return with my former, wilder tech holdings. These more mature companies, with AIM's assistance, performed very well through a variety of markets.
In the last two decades, dividend stocks have had good total return and AIM benefitted from the cash flow from dividends (interest rated contributed nearly nothing). My "Sandbox" portfolio of 10 stocks ranges from a high of 9%/yr to near zero yield with an average of around 3-4%. That helped during 2008-09, Covid and 2022.
Over time my efforts fell into these three goals for building AIM portfolio strategies:
1) Price Appreciation over time
2) Dividend Capture over time
3) Profitable Volatility Capture over time.
AIM is what I use for #3. The other two are used primarily for stock or ETF selection. No matter what emphasis one puts on price appreciation or dividends AIM will be there during times of high market stress to do good inventory management of the selections.
Fine tuning AIM to different types of investments can help, but for me, it's now "set and forget" as far as settings go.
Best wishes,
OAG
Hi Tom,
Many thanks for your warm welcome and the link.
Having dipped my toe into the Q&A's I can see the appeal of improving the "By the Book" system.
I suppose maximising returns over the "long term" is my aim. Drawdowns and long periods of being underwater in a simple Buy and Hold portfolio (J L Collins) make it unworkable for me. I'm looking at AIM (or a variation) to offer decent long term results using a simple system to take out the emotion of investing.
Thanks.
Will
Hello, Tom
Thank you very much for your response....I'll be crossing my fingers so you could find Barry's report!!!!
The AIM 2000 meeting should have been an interesting one...I can't imagine an AIM song played with an ukelele...I'm sure you had a great time!!!
Best regards,
Pedro Lopez
Welcome Will and feel free to ask questions as they arise. Here's a list of Q&As from over the years:
https://investorshub.advfn.com/AIM-"In-Depth"-Q&A-992
There's some good basic and advanced ideas there.
Best wishes,
OAG Tom
AIM is something that I've looked at for many years, never actually using it.
Having recently purchased Mr Lichello's book and garnering an understanding of the process. Perhaps it's time to commit.
Certainly an interesting read, the parallels with today (except the interest element) give pause for thought. Generally I've been a momentum investor, which has worked somewhat for me.
Having read the J L Collins "Simple Path to Wealth", the idea of combining a stock strategy and AIM seems appealing and I'm sure will lessen the heartbreak during market falls.
I'm sure to have plenty of questions in the coming weeks.
Will
Hi Pedro, Re: Barry Savage and his AIM 2000 report....
I remember his talk (and his ukelele solo and song about AIM) but don't know if I have a copy. I'll dig into the AIM archives and see what I find.
Barry was a great guy but disappeared from the board a long time ago.
Thanks for reaching out here. I hope we can help with Barry's report or info on the Money Spinner.
Best wishes,
OAG Tom
Hello, AIMERs
I hope you're doing well!!! First of all sorry for my English, I'm a Spanish lurker....
I've been reading I-hub board for a long time and I've to say there's a lot of useful information (48k posts are enough to make my brain explode) about the A.I.M. and its variants here. But since A.I.M. wise men (like Tom Veale, Toofuzzy, Lostcowboy, Conrad W., Don Carlson, Barry Savage, Myst, Husk and a large etc) have started their A.I.M discussion when I was just a teenager worried about having fun I feel that I've lost an opportunity to get on the AIM train...but as people often say: it's never too late...so I manage to get as much information I can deal with (I've been also reading the Silicon Investor Board and the Motley Fool Board....and even I've get a copy of the money spinner...). And The Money Spinner is the reason I'm writing here (and now): for the AIM 2000 meeting Mr. Barry Savage (aka labestul) has prepared a paper/report about the Money Spinner...so my question is, do you if this report is still available somewhere?
After all this wording the only thing I have to say is to thank you very much for all the hard work you've made to make A.I.M. known and make it more accessible.
Best regards,
Pedro.
Hi TDR and thanks for your comments,
Yes, it's nice to have Cash finally being a reasonable lubricant in our AIM engines. While not great, it's far better than it was during most of the last two decades.
For almost all of the New Millennium we've had negative real return on Cash as Inflation has been higher than Interest on short term treasuries, and that's harmful to AIM's total return. Even so, there's always a cost for insurance, even Portfolio Insurance. AIM insists we own some through most markets. That's okay, I wouldn't own a car or a house without insurance, either.
Thanks for joining in,
OAG Tom
"Steady as she goes!"
Thanks,
OAG Tom
Long time AIMer here and been following this forum for years.
I've observed some people use one stock, some multiple stocks, and other ETF/funds. Most of my AIM accounts are either 2+ individual stocks or ETF/mutual funds. While not as volatile, I have found the discipline for buy/sell over the years has given peace of mind by taking a lot of the emotion out.
The current environment reminds me of the mid-1970's with stagflation which AIM was designed to help navigate. Having cash in a sideways market where you might not be buying/selling is at least spitting of some nice interest. While we are not seeing 9% passbook rates, I was still able to see 2.75% on my cash position over the past 12 months. Not thrilling I know, but when compared to the market it's not too bad and contributed to a 3.25% gain overall for my largest AIM account last year. It also didn't hurt that I invested in commodities funds & dividend issuing stocks which are not typical AIM performers.
Anyway, thanks for "listening".
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of February 10th
_________________________
Short Term (18 Months)
Individual Stocks: 43% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 32% (Unchanged from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 46% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 31% (Unchanged from previous week)
Oscillator: 2.47 (Down .19 from previous week)
*See posts #44585 and #44588 for Tom's explanation
I'll give my thoughts on this. AIM assumes that the security you choose, if it drops comes back up within a reasonable time for you. If the security slides and become a "deep diver" and you apply AIM to it you could be in big trouble. Maybe it would recover in 10-20 years but do you have that much time? Or it may never recover and AIM can sink a lot of cash and get locked up.
So I propose that a leveraged etf like SOXL is too risky to AIM. If you're going to use leveraged funds stick to something broad based enough that you can be confident it will recover, eg. a leveraged fund based on the SP500.
Hi Toof, Re: BETA..............................
You are correct about Low BETA generally showing just less "amplitude" in stock price movement relative to the S&P 500. Here's what Investopedia says:
KEY TAKEAWAYS
* Beta (ß), primarily used in the capital asset pricing model (CAPM), is a measure of the volatility–or systematic risk–of a security or portfolio compared to the market as a whole.
* Beta data about an individual stock can only provide an investor with an approximation of how much risk the stock will add to a (presumably) diversified portfolio.
* For beta to be meaningful, the stock should be related to the benchmark that is used in the calculation.
* The S&P 500 has a beta of 1.0.
* Stocks with betas above 1 will tend to move with more momentum than the S&P 500; stocks with betas less than 1 with less momentum.
Tom, thank you. I'm (always) still learning. Don't know where I missed understanding that about beta, but I definitely had. Much appreciated.
Sold a few shares of GEO today.
Toofuzzy
Hi Tom
Actually in order to trade OPPOSITE the market it would need a NEGATIVE beta.
Low beta just means it moves up or down less.
Regardless I would just eyeball a 10 year chart to get an idea of the volatility.
Toofuzzy
Hi Tom
I am pretty sure they only include the components of the S+P 500 as that is in the name.
Toofuzzy
It's so quiet around i-Hub you could hear an electron drop......
Pretty much all the stocks I watch here have been nearly without posts since the new Year. AAPL and F are exceptions, getting some posts.
OAG Tom
Hi Jake, Re: BETA...................
A BETA below 1.00 just means it generally trades contrary to the market. A very low BETA could mean that it not only trades opposite the market but does so in a big way - sort of like a high BETA stock or fund has bigger price swings that something nearer 1.00.
Some of those low BETA ETFs had a better year last year than the higher BETA ETFs but not all. RYE (BETA 1.79) - Energy was the best over the last year with RYU, (BETA 0.65) - Utilities being second best. Energy certainly traded contrary to the rest of the market but has a long term high BETA. That was more of a Sector Rotation thing.
Hope this helps,
OAG Tom
How do you feel about beta values below 1.00?
This past year I started some AIM accounts using the same equal-weighted S&P sector funds, but I excluded the low-beta ETFs on the idea that if the ETF doesn't have much travel up and down, AIM would be affected, and my cash might be better employed in the higher-beta sector funds.
Does that sound reasonable, or am I missing something (which seems likely; I probably should have given this more thought) that, if I knew it, might help me see the low-beta sector ETFs more favorably?
Hi Toof, Re: Structure of the Equal Weight ETFs...................
I can't be sure how each fund's components are selected. Here's the same list with what little fundamental info given:
Note that most run BETA levels slightly above 1.000. There are three with BETA values below 1.0. Yields in general are pretty good.
Best wishes,
OAG Tom
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Assistants The Grabber Toofuzzy |
Here's a handy "Quick AIM Calculator" for finding the next AIM directed Buy and Sell prices for your portfolio holdings:
A.I.M. Users Bulletin Board (AIMUSERS): Thanks LC, Now they can use the "calculator" again! (advfn.com)
While the AIM book is no longer being reprinted, it is available from Amazon for their Kindle for $5.99.
http://www.amazon.com/How-Make-Stock-Market-Automatically-ebook/dp/B002VKJ1EI/ref=sr_1_1?s=books&ie=UTF8&qid=1395757939&sr=1-1&keywords=lichello
Mr. Lichello wrote the book on AIM in 1977. In the mid-'80s he put an infomercial on AIM on late night TV and attempted to sell his workbook and audio tapes.
(1) How To Make $1Million In The Stockmarket Infomercial - 1985 - YouTube
It's a reasonable review of the AIM method for those who are unfamiliar.
Run A Successful Equity Warehouse
Welcome to the AIM Users Bulletin Board. This is the thread to post your thoughts, questions and comments on the use of Robert Lichello's Automatic Investment Management for handling the risk of being involved in the Equities markets.
The AIM strategy gives the user LIFO gains of 20% minimum if the method is followed "by the book." It is ideally suited to those seeking long term investment growth while managing the risk of being invested.
Thoughts on being a successful Individual Investor
I wrote this book review a long time ago. It's a trader's interpretation of
Sun Tzu's "Art Of War." I related it to AIM as best I could.
------------------------------------------------------------------------
Mr. Lundell says, "Today's financial markets are the last bastion of unabashed conflict.....
To participate, you must be your own general, devising a strategy, gathering information, executing your plan, and adapting to the situation."
How can we use AIM and the v-Wave for strategic and tactical planning to carry out Mr. Lundell’s requirements to participate in the Equity Markets?
"Be your own general"
You are in charge. You are responsible. When you win, you benefit. When you lose, only you are to blame.
a) Broad trends persist. Discover them. They will survive boom and bust.
b) Don't contemplate engaging in war while beholden to another. They could become your ruler!
To me this means "Stay away from Margin Buying unless you are certain of victory."
c) Establish and maintain a "Baseline of Survival" for your command.
This is the "income" side of my overall portfolio.
d) Know that reality is governed by Darwinism; Long Term Survival belongs to the fittest.
"Devise a Strategy"
Our strategy is to sell inventory into market strength and to buy into market weakness. Robert Lichello's AIM algorithm provides us with a systematic approach to follow that employs this strategy.
a) Sell quality merchandise to all those willing to pay.
b) Buy quality merchandise when the price offers reasonable hope to resell at a profit.
c) Let the allocation of resources and inventory be governed by the course of the market and AIM's guidance.
"Gather Information"
Today there is no excuse for not being informed.
a) Differentiate between information VOLUME and QUALITY.
b) Differentiate between FACTS and OPINION.
c) Find good sources of judgement where you cannot act as judge.
d) Information is trusted only when provided by those proved trustworthy.
"Adapt to the Situation at Hand"
The v-Wave measures general U.S. Market Risk (and may be sensitive to world market risk) from low to average to high. This helps you gauge the situation by:
a) Gauging your initial cash reserve requirements on new investments
b) Gauging your on-going cash reserve requirements on established investments
c) Judging whether to establish a bias for accumulation or distribution
d) Possibly starting no new AIM accounts when the v-Wave is showing High Risk
e) Possibly ignoring all AIM Buy Signals during v-Wave High Risk events.
f) Following all AIM buy and sell signals during v-Wave Average Risk events
g) Possibly ignoring all AIM Sell signals during v-Wave Low Risk events
h) Re-assessing your "Baseline For Survival" at times when AIM has your account heavily in Cash
i) Always attempting to beat measured inflation by 5 basis points minimum after all taxes and living expenses are paid. If you do this consistently, in good and bad markets, you will be winning long term
j) Possibly using "vealies" when your positions are cash rich relative to the v-Wave. Limiting supply helps to keep Momentum player’s Demand high.
"Execute your Plan"
Set the plan in motion; know that it takes time for realization. Follow the plan without hesitation allowing the goals to be realized. The strategy is sound so execution is all that is required.
a) Buy when the plan says
b) Sell when the plan says
c) Be very patient when no buy or sell signals are being generated
Reading Mr. Lundell's interpretation of Sun Tzu's work will help you focus on your own plan. It will arm you with knowledge of what others not using AIM are doing in the market. Understanding Short Term Trader's strategy and tactics is like having a spy in the enemy's camp. AIM users can profit by knowing just how these people think and act. AIM acts as almost a mirror image of what goes on in a trader's mind.
-------------------------------------------------------------------------------------------------------------
The v-Wave........
Mr. Lichello used fixed cash starting levels; first it was 50/50 then 67/33 and in the last edition of his book 80/20 for the Equity/Cash ratio. This "one size fits all" approach is like a broken watch that shows the correct time twice a day but is wrong the rest of the time!
Minstrlman, a regular contributor here, helped gather data from Value Line and formed a highly capable risk-cash indicator for our use. Since then, J Derb continued his work each week. As an adjunct to the AIM methodology we now have a Cash Indicator which helps guide our starting and ongoing Cash Reserve level of AIM relative to measured market risk. It can be used as a general market barometer or specifically with the AIM method. The v-Wave (or VW) is derived from the Value Line "Appreciation Potential - Next 3-5 Years" (VLAP) indicator shown weekly in their Summary and Index Section for their 1700 stock edition. Looking back through V/L's history we find the peak Appreciation Potential occurred 12/23/1974 at +234%. Our continuous database starts January of 1982 and we scaled our "zero cash" to the market risk low point of early that year. We take the VLAP and manipulate it to get an indication of how much cash should be reserved for diversified mutual fund AIM accounts. It should be multiplied by your stock or portfolio's BETA to get the cash reserve level of less diversified or more aggressive holdings.
v-Wave Weekly Cash Reserve Indicator For AIM Users
Current years of the v-Wave:
For diversified portfolios the Median value for the v-Wave is 29.5%. High Risk is 34% cash or higher for individual company stocks. Low Risk is 24% cash or lower.
To get a more proper cash level for individual company stocks multiply the current "Diversified" value by 1.5. This gives us 51% as the high risk threshold and 36% for the low risk boundary.
Looking at the cumulative risk of the v-Wave gives another perspective:
Cumulative v-Wave is calculated by taking each week's v-Wave Stock value, subtracting the median value from it and adding it to the previous total.
Significant historical events are shown nicely here and the v-Wave's response at those times.
v-Wave Calculations can be found at #30219. The data are a work-in-progress for now.
TooFuzzy provided us with a handy "Quick AIM Calculator" Here's a link to that page:
A.I.M. Users Bulletin Board (AIMUSERS): Thanks LC, Now they can use the "calculator" again! (advfn.com)
(follow the link on the above page)
AIM has a predictable pattern of "cash burn" in a declining market. Depending upon the SAFE settings AIM will generate new buy orders sequentially as share prices decline. It can be helpful to know in advance about how deeply AIM is going to draw down one's cash reserves. This link is to the "Cash Burn" AIM page. It shows various end points based upon the starting cash reserve level. Here's a link to that page:
"" rel="nofollow noopener noreferrer ugc" target="_blank">http://www.aim-users.com/cashburn.htm"; rel="nofollow noopener noreferrer ugc">A.I.M. Cash Burn Rate (archive.org)
Best wishes,
Old AIM Guy
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