A.I.M. Users Bulletin Board (AIMUSERS)

[Make It Jake]

Hi Tom - Really appreciate your commentary posts.

[OldAIMGuy]

Good morning John,
James Brown said, "I feel Good!" He must have been looking at his portfolio after a rebound like we've had since the Tariff Tantrums. While the rebound has been nice, it shows the situation in the market isn't much different from where it was near the start of this year.


Risk is back where it was and the indexes are, too. Fundamentally, the market is no better or worse than on January first of this year. The v-Wave brings some clarity to this. It is suggesting 34% reserve cash right now for diversified portfolios, up one point from last week.

SignalPoint's Market Risk Indicator (MRI) looks through the flesh and sees the skeletal structure supporting the markets with four components. Two of those are currently in their Caution position as is the overall MRI.


Again we see the situation is little changed from the year's start. The MRI is also up a point this week to 33% suggested reserve cash buying power on diversified portfolios. The MRI Oscillator shows +7 indicating significant upward risk pressure right now.

The two caution components of the MRI are Relative Valuation and Speculation. Now, the Speculation Index is based in Value LIne's Best and Worst Performers data from the latest 13 weeks. Counting back to April 14th, we find the Spec Index was "Proactive" back then. So, is this cautionary level we're seeing right now just a reflex to that low risk time? Back then it took a loss of 49% to make the "worst" list and just a 15% gain to make it onto the "best" register. How about today? This week shows it requires a gain of 91% over these 13 weeks to make it to the "best" list while a loss of 15% gets your favorite stock listed with the "worst." So, the situation is essentially reversed from mid April of this year. It's as though 13 weeks ago someone flushed the Portfolio Toilet and now the bowl has just refilled! Same-O, Same-O!

Who benefitted from this? Only those who saw the tariff drama for what it was - a chance to deploy some reserve cash to accumulate more stock inventory at nice price discounts. Once again the Investing Herd was culled of those with weak hands. Our MRI and v-Wave saw this and guided us safely.

(Road Atlanta, 1995)
"Smoothness, Consistency and Concentration" are what is required to place well in the Investment Race.

Best wishes,
OAG Tom

[Make It Jake]

Current AIM-CASH weekly values – Large-caps increased, while mid- and small-caps decreased, from last week’s values.



Large- and mega-cap stocks : 55.7%



Mid-cap stocks : 59.1%



Small-cap stocks : 35.1%



(Links to Clive’s original AIM-CASH message and spreadsheet and a description of what I’ve modified are in post # 47330.)




With kind regards,
MakeItJake

[jaser20]

I have been using AIM for several years now. And have read the AIM book several times. What is interesting is that everytime I read the book or read Tom's old website aim-users.com, I learn something new. AIM features become more meaningful. On the surface, AIM seems very easy to implement and it is. Yet you really don't fully understand it unless you use it for a while and watch how the internals really work on real money. A big thank you goes out to Tom for all the improvements Split safe, Vealie, max cash and v-Wave. also ROCAR. They make a big difference in performance. ROCAR gives you a very different appreciation of the return you achieve without risking everything. I feel like a rudderless ship on sea without AIM now. I use excel to manage my AIM investments but really wish we could reinvest to make a newer version of the Newport program.

[jaser20]

I found the youtube channel and the email of the channel owner who had the AIM infomercial. Emailed him last February but no replies. The title of the youtube video was "How To Make $1Million in The Stockmarket Informercial - 1985". Youtube channel name: The W/O/C Archive channel. The owner's email is [e-mail] I asked why he took it down but no reply. maybe he'll reply if enough people emails him.

[JDerb]

v-WAVE 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 July 18th
_________________________

Short Term (18 Months)

Individual Stocks: 62% (Up 2 from previous week)

Diversified Mutual Funds or Portfolio: 41% (Up 1 from previous week)
__________________________

Long Term (3-5 Years)

Individual Stocks: 50% (Up 1 from previous week)

Diversified Mutual Funds
or Portfolio: 34% (Up 1 from previous week)
__________________________

Oscillator: 2.58 (Up 1.20 from previous week)


*See posts #44585 and #44588

[OldAIMGuy]

Correction.....
The line labeled WTC Attack is actually the 2003 market sell-off that was "delayed" by the WTC event. There were already signs the economy was in trouble.

OAG

[OldAIMGuy]

For those of you who've been investing and AIMing for a while, I thought this history from the start of 1982 might be helpful..............



Those precious moments when most of the MRI's components align in their "Proactive" range were times of high stress for investors and AIM's Savings and Loan department. The Purchasing Department's people were working overtime to get large amounts of inventory in the Equity Warehouse. The last, very quick, event was the Covid scare.

Happy Historical Perspective,
OAG Tom

[OldAIMGuy]

The Sales Dept stayed late yesterday and I just got another couple of reports.
Sold 5% of RSPN
Sold 10% of PRIM

It's always tough keeping up with the paperwork!

Best wishes,
OAG

[OldAIMGuy]

We parted company with some inventory recently. Shares of JETS were air mailed to new owners, some VTV and RSPT were also sent to happy buyers.

The AIM cash vault has been filling nicely.

Best wishes,
OAG Tom

[ls7550]

AIM ... Anti Irrationality Method

Many private investors are irrational, tendencies to buy high, sell (capitulate) low. Take the opposite side of irrationality ... and you're onto a winner.

:)

Clive

[JoeForkeyBolo]

Quarterly Update for Leveraged ETF Backtesting 2.0

My previous post left out an important factor for AIM investing – the amount of cash at the end of the test period. This data point enforces the power of AIM by beating buy-and-hold with less money invested on average, and also gives an indication of the investment performance at the end of the period, showing whether AIM was buying shares or spinning off shares for cash. As such, it's an important metric to report in the summary.

The problem of high levels of cash typically don't exist with leveraged ETFs because of the higher volatility than non-leveraged investments. Any extended period of cash spinoff is followed by periods where AIM is buying shares, lowering cash. The remaining problem of the higher potential of running out of cash on large drawdowns is handled well by using the drawdown curve strategy I've previously posted.

[Toofuzzy]

I would go with Fidelity if only because their high yield MM account ( of which you have a few choices ) doubles as the sweep account unlike Schwab .

Their trading platform is fairly straightforward. I think Interactive brokers has a steeper learning curve.

Toofuzzy

[OldAIMGuy]

Hi N, Re: Trade Size and AIM..................

AIM functions as a proportional control algorithm. It's much like "cruise control" on a car. Tiny hills, tiny throttle adjustments. Big hills, big throttle adjustments.

So, we as AIM users decide what size order we're willing to trade as a minimum. If the market surprises us with a big move, AIM will take that new information and suggest a larger than minimum order size.

Best wishes,
OAG Tom

[OldAIMGuy]

Hi ND, Re: v-Wave as a risk indicator and guide for AIM cash levels......

Yes, the v-Wave is constructed to be a general barometer measuring stock market risk. If it's high, market risk is high. Sometimes it is used just to filter the noise from the business news channels and publications. Looking at the three most recent years, you can see the risk measure move both up and down during different times in the market.

Some use it to factor whether to follow AIM's advice as to buying and selling. If one's stocks/funds correlate well with the overall stock market, this works well. If AIM's saying to sell a minimum amount of your inventory and the v-Wave is telling us that risk is at or in the Caution zone, then maybe we should listen to AIM! If the stock market is so bad that even your barber won't give you any stock tips and the v-Wave is showing very low market risk and AIM suggests you kick the moths out of your wallet and buy more inventory, chances are it's a good time to do so.

Currently the v-Wave database exists as an Excel spreadsheet. Its first data starts in 1982 and continues to date. It's a big spreadsheet.

Best wishes,
OAG Tom

[Adam]

Hi Jeff, I use Schwab, the browser version, and find it fine for AIM. For charting I usually look at bigcharts.com and sometimes stockcharts.com. I find the Schwab easier to navigate than Fidelity or Vanguard.
Adam

[OldAIMGuy]

Hi JD, Re: Market Risk....................

Let's open with an investing haiku............

Back flirting Caution
Fundamental limits stretch
In "Spandex" market.

That should set the tone for what we're seeing in the SignalPoint MRI and the v-Wave for this week. Three of the MRI's components rose in risk measure this week. Currently there are three neutral and only one cautious (Relative Valuation) but the Speculation Index is now borderline cautious also.



Overall, the MRI is close to crossing into its composite "caution" range. The MRI Oscillator shows +5, indicating significant upward risk pressure. Suggested Cash Reserve is 32% again this week (for diversified portfolios).

The v-Wave, based in Value LIne's "Appreciation Potential" data, is unchanged this week for the 3-5 Year time frame. Risk rose this week for the shorter term 18 Month horizon, however. Again, it seems to indicate the market recovery is a bit too much, too quickly. The v-Wave remains at 33% suggested cash held in reserve. The shorter term v-Wave rose 5 points.



So, it appears the fabric of the market is being stretched a bit. This doesn't mean it's about to go down. What these two indicators suggest is that upside potential is somewhat limited currently. We've seen many times in the past where markets can exist at relatively high risk for long periods and even advance. The risk level does suggest that limiting one's portfolio value expansion might be wise. To me, this is a time to make small, incremental sales to keep a lid on dollars at risk. The cash generated has a reasonable yield while we await an opportunity to re-deploy it.

Best wishes,
OAG Tom

[JoeForkeyBolo]

I have used Fidelity for many years, as well as several family members and friends. We are all very happy with Fidelity. I'm sure other brokers provide similar options, but I cannot speak to those from personal experience.

The following is provided by the Grok3 AI model. I personally use Trade for AIM conditional limit order entries in my AIM preemptive model, or Trading Dashboard if I am monitoring or trading a stock or ETF in real-time (non-AIM investing).

In my ETF backtesting, I use Nasdaq.com for historical price data and charting, Portfolio Backtester (https://testfol.io) for buy-and-hold performance and volatility/drawdown data, and the specific ETF website for historical dividend data. This data is probably available from Fidelity, but each of these sites serves my needs very well.

Here’s a concise summary of the three trading methods available on the Fidelity platform, based on available information:

Trade (Fidelity.com)

• Overview: A web-based trading interface integrated into Fidelity’s website, designed for straightforward trading without the need for software downloads.

• Features: Offers access to equities, ETFs, mutual funds, and options trading. Users can research, execute, and monitor trades using tools like real-time quotes, in-depth analytics, and a user-friendly trading ticket. It supports options trading with tools for evaluating strategies and managing positions.

• Best For: Beginner to intermediate traders who prefer a simple, browser-based experience with robust research tools

Trading Dashboard

• Overview: A configurable, web-based platform optimized for larger screens and tablets, offering a single-screen command center for trading and monitoring.

• Features: Provides streaming real-time market data, advanced charting (e.g., VWAP, Bollinger Bands), customizable layouts, and automated pattern recognition. Users can trade directly from charts, set alerts, and monitor portfolios/watchlists with real-time quotes and third-party analyst ratings. It’s not designed for mobile use.

• Best For: Traders seeking a flexible, browser-based solution with advanced charting and real-time data, suitable for intermediate to advanced users.

Active Trader Pro (ATP)

• Overview: A downloadable desktop platform (PC/Mac) tailored for active traders, offering customizable tools and real-time analytics.

• Features: Includes single/multi-trade/directed trading, robust options analysis, real-time streaming data, customizable layouts, and tools like Trade Armor® for visualizing trade strategies. The Daily Dashboard provides market snapshots and portfolio events. ATP Beta introduces enhanced charting and Mac-native performance.

• Best For: Advanced traders with frequent trading activity (though the 36+ trades/year eligibility is no longer required) needing powerful, customizable tools.

Key Notes:

• All platforms support equities, ETFs, mutual funds, and options, with varying levels of complexity and customization.

• Fidelity.com’s Trade is the simplest, Trading Dashboard offers a web-based middle ground, and Active Trader Pro is the most robust for active traders.

• Options trading carries significant risk

For more details, visit Fidelity.com or contact their Active Trader Services at 800-564-0211.

[jdmagaw]

Brokers for Index ETFs.

Good Monday Morning.

I need to transfer my work 401k to a personal account. I currently have some accounts with Schwab, but I find them lacking in charting and data for AIM. I'd appreciate your comments about other investment firms. I've heard Fidelity, Vanguard, and Interactive Brokers are reasonable alternatives.

Thanks in advance for your comments.

Jeff

[JoeForkeyBolo]

Quarterly Update for Leveraged ETF Backtesting

As a reminder, this backtesting is done using the preemptive AIM spreadsheet model I created where conditional limit orders are in place for the next buy and sell orders for each investment. Testing assumes all orders are placed outside of market hours, which limits trades to a maximum of one trade per day. AIM and Buy/Hold returns include dividend reinvestment. AIM returns includes interest on cash balance based on Fidelity's SPAXX money market fund rate, calculated on the average rate and average cash balance over each ETF test period – not as accurate as monthly calculations, but a hell of a lot less work, and close enough for comparison. 😎

Best return of AIM vs. Buy/Hold highlighted in GREEN. The above average AIM CAGRs are highlighted in YELLOW (separate averages for Index funds and Sector funds).

Due to the larger number of ETFs being tested, I have split the results into INDEX and SECTOR funds. I am planning to add two additional International ETFs but have not started testing on those yet. Enjoy!

[Make It Jake]

Current AIM-CASH weekly values all (again) decreased from the previous week.



Large- and mega-cap stocks : 55.6%



Mid-cap stocks : 59.4%



Small-cap stocks : 35.4%



(Links to Clive’s original AIM-CASH message and spreadsheet and a description of what I’ve modified are in post # 47330.)


With kind regards,
MakeItJake

[JDerb]

v-WAVE 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 July 11th
_________________________

Short Term (18 Months)

Individual Stocks: 60% (Up 8 from previous week)

Diversified Mutual Funds or Portfolio: 40% (Up 5 from previous week)
__________________________

Long Term (3-5 Years)

Individual Stocks: 49% (Unchanged from previous week)

Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
__________________________

Oscillator: 1.38 (Down .12 from previous week)


*See posts #44585 and #44588

[Toofuzzy]

Hi jake

So I guess it is like saying the current P/E ratio of the s+p 500 ( spy ) can be used to predict future returns.

That makes sense.

AIM has you sell and raise cash as prices go up and cash will be at the highest level at the highest price and future potential returns will be at the lowest level at higher prices.

I suppose paper trading a broad index that you do not own can inform about the whole market based on the percent cash. While interesting the only use I see is to confirm what AIM has you do anyway so you stick with it.

I started AIM in 1995 and by 1999 I was thinking I would have been better off doing buy and hold, then 2000 came a long and I am glad AIM had me in better than 70% cash. AIM had me 100% invested by 2002

Thanks for the explanation

Toofuzzy

[Make It Jake]

Hi Toof,

Thanks for the reply. I'm not sure if you're saying, Jake, I don't get it, or Jake, I don't want it. I'll assume the first and break it down better (or at least I hope it's better!), but maybe it's the second and you'll just shake your head or say some interesting words derived from the good old Anglo-Saxon and blip over the rest of this. That's OK.

1. What's AIM-CASH? It's a way to assign a valuation number to the current price level of an index (let's say the S&P 500), simply by using by-the-book AIM. Clive's AIM-CASH model doesn't use Vealies or split SAFE or make buy or sell decisions contingent on other factors. It just paper-trades an AIM portfolio driven by index prices, adjusted for inflation, taking every trade AIM advises unless it runs out of cash (then it has to wait until AIM advises a sale). The AIM-CASH percentage is just the percentage of cash in the total portfolio value, of that paper-trade portfolio.

In Clive's original messages describing it (which I think actually stretch back years before the ones I started replying to a year or so ago), he noted in part that the cash percentage does a reasonable job of flagging market lows and highs. (My wording, not his; I don't want to put words in his mouth.) High levels of cash in the paper-trade portfolio tend to flag market highs, and vice versa. It's just AIM ; that's what AIM does -- build cash as prices rise, and invest cash as they fall. I ran some tests that seemed to confirm this.

2. The tables I put up each week show the AIM-CASH percentage for three indexes, which proxy for large-cap, mid-cap, and small-cap US stocks.

I built a database that shows, for each week in the history of the indexes I track, the AIM-CASH value for that week and inflation-adjusted forward returns based on that week's index price. Drawing on the historical weeks from the database whose AIM-CASH values were closest to this week's value, the tables show what the median return was for that set of historical weeks, and what percentage of them showed a gain (the win rate), for several holding periods. They also show the range (the ISR) of the middle 2/3 of returns for the set.

3. The tables also show the same measures for the overall history -- not just the set of weeks that were closest to the current AIM-CASH value, but all of 'em -- to enable comparisons to be made.

So, as an example let's take 52-week returns, and the figures in the table for the large-cap stocks from last week, when AIM-CASH was at 55.9%.

In the historical set of weeks that were closest to that value, 35% of them showed gains 52 weeks later. The median 52-week (inflation-adjusted) return for that set of weeks was 0.921 -- that is, a 7.9% loss -- and two-thirds of the 52-week returns fell between 0.787 and 1.104.

By comparison with the overall history, these are not very good results. The overall history shows an average 52-week inflation-adjusted return of 1.055, a win rate of 66%, and an ISR ranging between 0.90 and 1.20.

The private messages I was replying to basically asked, given that the weeks with AIM-CASH levels closest to the current level show poor results, are you using this information to drive decisions about your investments?

Well, yes, I am, a bit, but with some pretty serious caveats, which I talked about in the message you replied to.

This is a convenient place and time to end this message. Does it help clarify things at all?


With kind regards,
MakeItJake

[karw]

Hi Nokodemion,

Yesterday : Buy Threshold = 1% and Sell Threshold = 2.75%, Buy Trading Size = 1% and Sell Trading Size = 5.52%. Total : 10.27%


interesting to see flexible safe and trade sizes. I have thought about it, but have not well formed ideas about it. ( variable buy safe excluded)

increasing sell threshold and trading size and decreasing buy threshold and trading size in a BULL MARKET, GOLDEN CROSS PASSED and Price above SMA200 and above SMA50 ... It gave me a contrarian gut feeling ... Same for BEAR MARKET, DEATH CROSS PASSED and Price under SMA200 and under SMA50 decreasing sell threshold and trading size and and increasing buy threshold and trading size.

this seems logical to adapt AIM to a bull market and to a bear market. you have to know in which market type you are.

at this moment I use AIM By the Book, classic AIM, only use a buy safe increase to manage cash levels. I AIM broad market indexes in this way and it might not be applicable for Bitcoin etc.

tomorrow I will drive to 'La douce France' for a vacation. When back (in a few weeks time), I will have more time to read your post and answer it.

Till then, Viva la independence, et bonne journée à vous, k

[Toofuzzy]

Jake

I honestly have no clue what you are talking about about.

I follow the AIM signals because I don't know how to predict when to buy or sell. Any adjustments I would make to the AIM parameters would end up being at the wrong time.

Not always,
Toofuzzy

[nokodemion]

Happy Financial Independence Day!!!!!! 🎉🥳🎉

The Vwave indicator to use as cash control, is this a kind of market risk indicator? Do you know its retrievable through an API?

Thx for your reply.. and enjoy Happy Financial Independence Day!!!

[nokodemion]

Agree,

Reward and Punishment, Pleasure and Pain...

Withdrawals are indeed a subjective pain in the ****** I maintain a withdrawal policy when cash balance is greater then my portfolio control EURO I withdraw the greater amount to my bank account, portfolio control EURO increases with each increase of portfolio control BTC on a buy or a Vealie. And on my bank account there it disappears in a ghostly costly way called maintaining my comfortzone called living. After all we are the only animals on this planet that must pay up to experience this thing called living, to earn a livelihood. From the day you are born until the day we die.

Tins of Dog Food... I feel you...the risk of a wipe-out... was it worth taking the risk? Why we have this feeling of responsibility.

Are you responsible or feel responsible to bring about heirs that conforms to the pattern which the society has established, which means you accept the immorality of the society that is. If you feel totally responsible you are responsible from the moment your heirs are born till the moment it dies. I'm responsible for my act, what is your action based on? How can you be responsible, when you, when your action is the result of a formula that has been handed down to you?

I know this is the whole point you are trying to convey. You are aware... I really enjoy for years reading your contributions on the forums. Know you are noticed!!

I wonder, your answer to this question: What is your take on a CAP on portfolio control? And in what indicators would you decide to reset portfolio control? *Black Swan* Your recap on synchrovest comes to mind... there you stated at 50% profit Sell Out, and start AIM with the proceeds or start another Synchrovest. How would this, could this be applied to AIM? Or is it exactly not the right thing to consider for AIM?

Thx, regards,

N.

[nokodemion]

Hi K...

Interesting...

I came up with this:

// Calculate cash ratio and dynamic thresholds
const cash_ratio = new Decimal(eur_balance).div(portfolio_control_btc).mul(100).toNumber();
const f_xy = 90 / cash_ratio; // f(x, y) = 90% / (EUR VALUE / portfolio_control_btc)
let buyThreshold;
let sellThreshold;

if (crossover_status === 'BULL MARKET') {
buyThreshold = 0.01; // Default 1% for GOLDEN CROSS
const price_above_sma50 = current_price.gt(sma_50);
const price_above_sma200 = current_price.gt(sma_200);
const true_count = (price_above_sma50 ? 1 : 0) + (price_above_sma200 ? 1 : 0) + 1; // +1 for BULL MARKET
if (true_count === 1) {
sellThreshold = (f_xy / 100).toFixed(4); // Level 1
} else if (true_count === 2) {
sellThreshold = ((f_xy * 2) / 100).toFixed(4); // Level 2
} else {
sellThreshold = ((f_xy * 3) / 100).toFixed(4); // Level 3
}
} else if (crossover_status === 'BEAR MARKET') {
sellThreshold = 0.01; // Default 1% for DEATH CROSS
const price_below_sma50 = current_price.lt(sma_50);
const price_below_sma200 = current_price.lt(sma_200);
const true_count = (price_below_sma50 ? 1 : 0) + (price_below_sma200 ? 1 : 0) + 1; // +1 for DEATH CROSS
if (true_count === 1) {
buyThreshold = (f_xy / 100).toFixed(4); // Level 1
} else if (true_count === 2) {
buyThreshold = ((f_xy * 2) / 100).toFixed(4); // Level 2
} else {
buyThreshold = ((f_xy * 3) / 100).toFixed(4); // Level 3
}
} else {
buyThreshold = 0.01; // Default for NEUTRAL
sellThreshold = 0.01; // Default for NEUTRAL
}

PORTFOLIO_CONTROL_EUR = 50%
CASH RATIO = 90% DRAWDOWN / (EUROVALUE / PORTFOLIO_CONTROl_EUR). 90% is the historical max for Bitcoin. Better sure than sorry.

The fun part is : a 3 level multiplication of f_xy (Cash Ratio) based on market direction. The effect is really nice, cash ratio goes up after each buy.

BULL MARKET = GOLDEN CROSS = SMA50 > SMA200 = DEFAULT BUY SAFE = 1%

Multiplication: 1-3 base on True or False.

1. BULL MARKET + 1
2. PRICE ABOVE SMA50 +1
3. PRICE ABOVE SMA200 +1

1. BEAR MARKET + 1
2. PRICE UNDER SMA50 + 1
3. PRICE UNDER SMA200 + 1

Awesome Catch ... K ...

Now...I am still wresting about the trading size. What are your thoughts about that? I have something called deviation for the SMA50 and SMA200... this is the percentage of price above or under the SMA50 and SMA200, I was thinking, For Example, Yesterday Bitcoin Price had a deviation on SMA200 of +4.75% and +0.67% on the SMA50. I could count them together? As long as they are positive. 5.42%. But be careful the current indicators are BULL MARKET-GOLDEN CROSS this means, The deviation should be used for SELL TRADING SIZE. When prices go down < SMA50 means sell trading size = 4.75% (SMA200) when prices go further down < SMA200 we will end up in BEAR MARKET territory with a default of 1% for sell trading size. (on little recoveries, we sell 1% CASH BALANCE management as addition to your CASH Ratio. The moment the SMA50 goes under SMA200 = DEATH CROSS the same mechanics apply to the buy side trading sizes. For example. Yesterday : Buy Threshold = 1% and Sell Threshold = 2.75%, Buy Trading Size = 1% and Sell Trading Size = 5.52%. Total : 10.27%

In this example (dev account) I had 102% cash...I made scenarios when cash balance drops, when this goes lower... percentages increase in a sensitive way...on the buy side of things... I hope you can understand what I try to convey... any feedback or ideas or additions are welcome.

PS: I had a hard time, to grasp increasing sell threshold and trading size and decreasing buy threshold and trading size in a BULL MARKET, GOLDEN CROSS PASSED and Price above SMA200 and above SMA50 ... It gave me a contrarian gut feeling ... Same for BEAR MARKET, DEATH CROSS PASSED and Price under SMA200 and under SMA50 decreasing sell threshold and trading size and and increasing buy threshold and trading size. If you can see the mechnics and their implications, you can never unsee them :)

Srry for my english.

Thx, Regards,

N.

[nokodemion]

Hi K...

Posted 2 times, srry.

[OldAIMGuy]

Happy Financial Independence Day!!!!!!

🎉

[Make It Jake]

I received a couple of private messages asking about AIM-CASH. I don't use the paid tier, so I can't send private replies ; creating a thread here instead.

The key take-away (at least, as I see it) from the messages was whether, and/or how, to make this measure actionable. ("Are you currently holding more cash in your large-cap portfolio or are you rotating to smaller and medium-sized stocks with higher expected returns?")

Some caveats immediately come to mind. AIM-CASH is a valuation measure (as the person who messaged me noted). Valuation is one vector that I track, but it doesn't account for things like trend, market sentiment, short- and long-term volatility measures, rate spreads, and so on*. By itself, I think, it's useful -- but useful as one thing among many. Or at least, among several. And then, AIM-CASH is just one valuation measure (there are others -- the VWave, earnings/price ratios, ...). So, it's good to keep it in that perspective.

* Margin note : It -- meaning AIM-CASH -- doesn't account for them explicitly. It's purely price-driven, but in theory price may account for a lot of other factors. Countervailing view: "The difference between theory and practice is rather greater in practice than it is in theory." (On the other hand, there's always an other hand. Theoretically.)

The charts I put up look at historical AIM-CASH levels in several ways. Real return (annualized), win rates, and how diffuse the return distribution (the ISR) is, for a relatively small sample set of historical weeks which had AIM-CASH levels close to the current week's levels. The caveat here is that history sometimes rhymes, but I doubt it repeats. It's what we've got available for use, but it needs to be taken as an approximation, and likely a flawed one at that.

And while it's possible for any of the measures I look at to be so great or so small, in comparison with the overall history, as to be considered unusual, that isn't "proof" that they're meaningful. I had a doctor once who reassured patients whose own experience worried them (that is, their own experience was something like the measure of a small sample set) but didn't worry the doctor, by saying of the presenting complaint, "I know it concerns you, but medically it's well within the normal range of variation." I no longer put up statistical likelihood figures, but I do tend to check whether these measures are, or aren't, "well within the normal range". The question I'd like to be able to answer is, how likely is so large (or small) a win rate, or a return, to be due to blind witless luck -- to chance? And even then, if the checks I use suggest that what's showing up is not likely to be due to chance, that doesn't prove that it IS likely to be due to the valuation levels ; there could be other factors driving it which happened to coincide at the time (but not necessarily at this time).

Those are fairly serious caveats.

WITH ALL THAT SAID ... yeah, I do use this to some extent. For large-cap holdings, lately, I've been taking AIM sell suggestions and not using Vealies. In times when the sample-set win rates and CAGRs are more pleasant to look at, I'd hold less cash. The figures for mid-caps and small-caps are nicer to look at but I'm not convinced they're due to anything other than chance (more work needed on that). Bottom line for me is that I have some trust in this stuff as I currently understand it, and to the degree that I've explored the quirks and kinks, but not so much that I make radical shifts in allocation.

And please keep in mind, I've been wrong many times before 😉

@Clive - I know you only check in here rarely, but I'd be very curious to see what you make of this. @OldAimGuy and @JDerb, the same goes for your views. And anyone who cares to chime in. I read nearly everything (and even comprehend some of it).



With kind regards,
MakeItJake

[OldAIMGuy]

Six Month Report on Portfolios at my Equity Warehouse........................

As a point of reference, the S&P 500 YTD is up 5.5%.

My IRA (Former Twinvest, now being managed with AIM)


10 Stock Composite


10 Business Sector ETF Composite Portfolio


9 Style based International ETFs (Small, Mid and Large Cap in both Growth and Value plus Small and Large Emerging Markets and International REIT ETFs)


The real surprise is how well the International portfolio has done this year. Adding over 16% for the YTD on top of good performance since the end of '22, this portfolio and its "diversification" added overall to my account has helped nicely.

Best wishes,
OAG Tom

[Toofuzzy]

To buy a hard copy of the book
Go to

Alibris.com

[OldAIMGuy]

Re: June Performance for my Domestic portfolio....................................

June helped raise my US Sector ETF portfolio to a new all time high.

A small amount of that shifted over to the Cash side with a few sales.
Best wishes,
OAG Tom
PS: I'll update the other Warehouse portfolios later......

[Make It Jake]

>> we're still looking at valuations as the main risk component that is worrisome.

For large- and mega-cap stocks, the AIM-CASH valuation is in a range where, in the past, results for following weeks and months were mostly well below average. Both the win rates (the percentage of time where following weeks brought net gains) and the returns were for the most part well below the overall averages over many years.

AIM-CASH valuations for mid-cap and small-cap stocks show a different picture, though. For the most part win rates and returns for historical weeks with valuations in the same range as the present exceeded the overall averages.

My personal take is that I'm currently more willing to transact AIM-directed sell suggestions (that is, less likely to substitute a Vealie when the cash reserve is high for that particular portfolio), at least for large-cap stocks and funds/ETFs that lean toward them.

(Links to Clive’s original AIM-CASH message and spreadsheet and a description of what I’ve modified are in post # 47330.)

With kind regards,
MakeItJake

[OldAIMGuy]

Good morning JD, Re: v-Wave and MRI.....................

It appears these two are again almost back in sync. The v-Wave 3-5 Year is now at 33% suggested cash and the MRI rose a point this week to 32%.
I highlighted the Tariff Trauma period since both indicators read this correctly as being a short term risk reduction and buying opportunity.





It would appear from the MRI's data that we're still looking at valuations as the main risk component that is worrisome. Share priced have risen back to where the average P/E for the Value Line 1700 stocks is now 18.1.The rest of the MRI components are in their neutral territory.

Best wishes,
OAG Tom

[Make It Jake]

Current AIM-CASH weekly values (all decreased from the previous week)

Large- and mega-cap stocks : 55.9%



Mid-cap stocks : 60.0%



Small-cap stocks : 36.0%



(Links to Clive’s original AIM-CASH message and spreadsheet and a description of what I’ve modified are in post # 47330.)

With kind regards,
MakeItJake

[JDerb]

v-WAVE 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 July 4th🇺🇲
_________________________

Short Term (18 Months)

Individual Stocks: 52% (Down 3 from previous week)

Diversified Mutual Funds or Portfolio: 35% (Down 2 from previous week)
__________________________

Long Term (3-5 Years)

Individual Stocks: 49% (Unchanged from previous week)

Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
__________________________

Oscillator: 1.50 (Down .12 from previous week)


*See posts #44585 and #44588

[OldAIMGuy]

Again this week, international risk activities occurred after the equity markets were closed for the weekend. Whether this was intentional or not is not something I am privileged to know. However, it does mean that SignalPoint and v-Wave market risk indicators are updated with only information through last Friday's close. Even so, we see the SignalPoint Market Risk Indicator rising another point to 31% suggested cash and its associated Oscillator at +6, indicating strong upward risk pressure.



Three of the four MRI components rose in their own risk territories helping to push this upward in risk profile. While still two points shy of its Caution threshold, we acknowledge the trend.

The v-Wave market risk indicator is in harmony with the MRI showing increased risk from the market lows, but it remained steady through last Friday's close.



At 33% suggested cash reserve, it's on its Caution threshold.

While neither indicator is designed as a "risk on/risk off' device, both are suggested significant reserves of cash. Cash is the insurance policy of our Equity Warehouses. While it doesn't prevent downturns, it is there to help us recover from them. At 4.34% yield on the 13 Week Treasury, it is offering a healthy improvement over Value Line's average dividend of just 2.2% (median for the last 40 years). Both risk indicators suggest it would be good advice to follow any inventory reduction signals from Mr. Lichello's AIM algorithm.

Best wishes,
OAG Tom
PS: no changes were shown in Value Line's 3-5 year growth model portfolio this week.

[OldAIMGuy]

Welcome JD, Re: Q & A help....

This page here on iHub will help fill some of the gaps between Mr L's book and discussions here.

https://investorshub.advfn.com/A-I-M-In-Depth-QandA-992

Please feel free to ask questions here as our group are always up for covering topics.

Best wishes,
OAG Tom

[JoeForkeyBolo]

This board is probably your best option for understanding the terms you that are beyond what Lichello covered in his books. Although AIM is a great investment method (maybe THE greatest), it's not without a few shortcomings in certain market conditions.

I suspect the terms you're not familiar with are related to methods and strategies developed to address some of those shortcomings. It's probably best if you ask your questions on this board about what you want to better understand. There are many seasoned AIM investors here who will be happy to help you.

[JDRows]

Hello - There are terms herein with which I'm not familiar (I last read the Lichello book 10 years ago). Is there a document, a link or a book I can buy that will allow me to get up to speed? Thanks in Advance

[Make It Jake]

Current AIM-CASH weekly values



Large- and mega-cap stocks : 56.3%. Unchanged vs. previous week.



Mid-cap stocks : 60.3%. Increase vs. previous week.



Small-cap stocks : 36.4%. Increase vs. previous week.



(Links to Clive’s original AIM-CASH message and spreadsheet and a description of what I’ve modified are in post # 47330.)

With kind regards,
MakeItJake

[JDerb]

v-WAVE 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 June 27th
_________________________

Short Term (18 Months)

Individual Stocks: 55% (Unchanged from previous week)

Diversified Mutual Funds or Portfolio: 37% (Unchanged from previous week)
__________________________

Long Term (3-5 Years)

Individual Stocks: 49% (Unchanged from previous week)

Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
__________________________

Oscillator: 1.62 (Down .12 from previous week)


*See posts #44585 and #44588

[The Grabber]

Thanks Tom!
IIRC, I was the 1st recipient.
I don't remember what my 'Strewie' was to earn it, but I do remember that I did in fact deserve it!
What an Honor! 😁

[karw]

50% cash

it is nice to have 50% cash, it defends the position in case of a 50% drawdown.
it is also nice to have more than 50% shares, to get more growth.
f.e. cash can be capped at 30% with vealies.
then 70% shares in the machine.
30% cash is not enough for a 50% drawdown.
buysafe increases can help to manage a 50% drawdown with 30% cash.
use a buysafe function f(x,y) where
x = max drawdown
y = % cash in the machine
this mechanism is used now for a few ETFs.
at the start 0% buy safe and 10% sell safe.
after each buy the buysafe is increased.
minimum transaction sizes are small.
not too small for there will be too many transactions.
not too big for there will be no transactions.

there will always be enough cash for the max drawdown
and every buy signal can be executed

kind regards, k

[OldAIMGuy]

Hi Clive, Re: The late '60s and early '70s......................

My first shares of stock and one mutual fund started in the 1969 to 1974 massive market decline. I used to keep an AIM model of the 1969 to 1980 time frame on my wall to remind me of the not-so-good times. It was brutal for the Buy/Hold investor but not so bad for the AIM investor. It seems to me AIM was flat broke for several years before it started to rebuild its cash reserve balance. That was original AIM and started with a 50% cash reserve. It beat the pants off of Buy/Hold by 1980.

I didn't learn of AIM until 1986, so didn't have the benefit of good equity warehouse management during the '69 to '74 disaster.

Best wishes and thanks for the reminder,
OAG Tom

[ls7550]

Correction: Lichello hadn't forgotten about the 1970's carnage, as per the 4th edition Preface

[ls7550]

The original AIM form, 50% initial cash etc. was devised with fear/pain utmost in mind. During the 1970's many saw much if not all of their lifetime savings/investments lost in just a few years, as did many of those that endured the 1930's Wall Street crash. Decades later Lichello revised AIM with missed opportunity in mind ... how much more might have been accumulated had one not been so conservative across a great period for stocks, but where that in part over-looked/forgot the pain/fear cases of 1930's/1970's history. Standard/original AIM works, and works well. Yes its a cash-cow, regularly throws off more cash and lowers rewards, however the rewards can still be reasonable enough, just not as much as if you'd invested more aggressively across a good/great era. For those that have already established a sizable pot and have more regard for protection rather than reward standard AIM is one of the safest choices around. Withdrawing 8%/year from the cash pot and likely you'll see the portfolio value maintain its nominal value, but lose out to inflation, save some of that 8% withdrawal, perhaps half (spend 4%, save 4%) and that cash account + interest will build up over the years. Basically you'll broadly see declining number of shares being held (AIM is inclined to signal more sell trades than buy trades), AIM broadly maintaining its original nominal value, have covered spending and have accumulated a cash deposit account that after perhaps 25 years might compare in value to the original inflation adjusted total investment. Likely a lot less total return than had you gone all-in on stocks and seen good rewards, but importantly a lot more than if a repeat of the 1930's/1970's type cases were endured (that may present once in every 50 years or so, so a dice roll as to if for your own particular investment lifetime whether you live through such a case or not).

A more assured outcome of perhaps spending 4%/year, leaving a legacy for heirs perhaps comparable to the original inflation adjusted start date value, for some is better than maybe leaving a legacy of multiples of the inflation adjusted original portfolio value but where in some cases after just a few years your portfolio had evaporated and your Sunday family feast days had been replaced with servings from tins of dog food. Fundamentally a choice between whether you'll more likely have a reasonable multiple decades retirement, leave a modest legacy for heirs, or potentially leave a very generous legacy for heirs, but at the risk of a wipe-out. Often you'll find that legacies for heirs are largely irrelevant, they'll more often have already independently financially established themselves such that your risk taking was pointless.