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Hi KH
I dont know if this will prove to be a good choice but I just put most of my "cash" in to PHDG.
It is a hedged S+P 500 fund. Yields over 5.5% and is supposed to go up in a market crash. We havent had one of them since the fund was established so we will see.
Decide for yourself.
Toofuzzy
Q........Parking your cash
I have seen some discussion about parking cash in the other aim board. From my previous posts you know that I am waiting for AIM to give me a buy or sell order for IVE. Right now, I have approx 12k of my portfolio in cash earning a couple cents per month. I have an account with TD Ameritrade. Do you have any suggestions on making this money work more for me while I wait?
Thanks,
A...............
Here's a relatively stable income fund that should remain above the money market funds payout through time. It's not paying extensively above MMFs but it at least is paying something.
https://www.flexshares.com/exchange-traded-funds/ready-access-variable-income-fund
Ready Access Variable Income (RAVI) might work for you and is simple.
Remember there are trading costs involved, so that has to be considered, too. MMFs at least don't have any cost to use or deposit.
Parking your cash
I have seen some discussion about parking cash in the other aim board. From my previous posts you know that I am waiting for AIM to give me a buy or sell order for IVE. Right now, I have approx 12k of my portfolio in cash earning a couple cents per month. I have an account with TD Ameritrade. Do you have any suggestions on making this money work more for me while I wait?
Thanks,
Hi Ray, Re: Sector ETF investing..............
There is going to be some difference in opinion on this subject. The answer is going to be dependent upon how you view your investments and how you view AIM.
Mr. Lichello thought it was a good idea to have just one AIM account managing an entire portfolio of investments. Inside that basket of stocks and bond funds he envisioned the owner making choices as to what was held, bought and sold. AIM said, "Sell $1000 of stock" and the owner then said, "Let's sell $1000 of Energy Sector because (your choice) 1) it's been a real dog or 2) it's risen a bunch and it's time to take profits." The same is true on the Buy side. So, if you build a single AIM portfolio out of sector ETFs you will have these sorts of decisions to make.
The above example will determine if you want to work the 'sector rotation' side of the street, the contrary cross roads or the momentum side. Obviously if you change up your thinking at each decision point (AIM directed trade) you could end up suffering from Lemming fever or getting caught up in the group-think of Wall Street.
If your portfolio is large enough to run separate AIM engines for each sector ETF, there is far less decision making to be done. Each AIM engine will take care of itself. Each will be giving advice based upon its own market movement. Since you are not buying individual company stocks, "single stock" risk is greatly reduced. This enhances the effectiveness and success of buying into weakness. The Sell side of AIM will keep you honest and level headed instead of getting caught up in a love affair with an individual stock or sector.
We already know that economies, markets and sectors of markets have cycles. AIM is custom built to take advantage of the cyclical behavior and profit from it. However, we can't ignore price appreciation potential. If a particular sector rises in an AIM basket of ETFs we might be tempted to "let it ride" or to "sell and take profits." Which is correct? If we sell out of a sector in a basket because it has been most profitable, how do we know if that last sale was a cyclical peak or just the middle stage of a very long upward trend? If we 'let it ride' are we being sucked into treating it as a favorite just when it is about to peak?
Experience suggests that selling out of a sector during a bullish period is a two edged sword. It might prove to be timed beautifully or might be premature. We won't know the outcome until later. AIM is quite frugal in its activity, so we can trust it to make good decisions. During the '90s it would have spent much of the decade selling profitable chunks of the Tech and Telecomm sectors and never run out of shares if those were individually AIM'd. In a basket they might have suffered either from underperformance of selling out too soon or risk expansion of "let it ride." As individual AIMs they would eventually also near the peak of the bubble, underperformed but would have done so with a huge Insurance Policy of cash reserves (which later proved essential for keeping AIM running).
Personally, I AIM each individual business sector ETF primarily in the US and individually AIM geographical region ETFs outside the US. Now I use both geographical ex-US and "style" based ETFs outside the US (Europe, Pacific Rim, etc for geographical and small, mid and large cap both value and growth for style). Each is AIM'd individually for maximum benefit of its own slice of the business and economic cycles.
One last thought is that of individual cash reserves vs 'central bank' type cash reserve. If each AIM engine has a specific cash reserve the other sectors can't pilfer cash, they can only spend their own. If combined, you could have one sector 'over draw' its cash and borrow from the others. There can be advantages and disadvantages here as well. If you run a very lean cash reserve maximum for each sector, then you should probably have separate reserves. If you let AIM decide how much cash is the maximum, then sharing might be better.
I run my overall portfolio like a conglomerate of Profit Centers. Each is responsible for its own profitability and cash reserve. At the board of directors level, decisions can be made as to whether an individual sector or region can or should borrow cash from the Conglomerate on a temporary basis based upon special circumstances. Think of the crushing of the Energy sector this last year or the routing of the emerging markets over the last 18 months or so. Here, AIM suggests buying more shares even though cash has been exhausted in that sector/region. Should that sector be allowed to borrow from the parent organization? That's not AIM's decision but the Board of Directors.
Sector ETF Question.
Are sector etfs long term holdings, or held through a cycle and then sold off. The way I'm thinking is that if you buy a fund and let AIM manage it through a cycle, then the price drops, you are buying back using the gains that you accumulated on the rise.
Where in a cycle is it best to buy into and exit a sector etf?
Thanks,
Ray
I started Aiming a leveraged energy ETF a few months ago. As low as it was I had a few buys and at least one sell.
The leveraged funds are not for the faint of heart. With a 30% drop in the unleveraged version, a 3x fund could go to zero.
Toofuzzy
HI KH, THanks for the reply. It's always nice to collect some 'rent' while we await some price appreciation. The trades will come, but may take time.
Hi Old aim guy,
No buy or sell on IVE yet. Collected a couple quarters of dividends so far. The 2.2% yield helps.
Very good point Toofuzzy. I pulled the trigger this morning.
With Aiming, the best thing that can hapoen is that it goes down and you get fully invested before it goes up.
Toofuzzy
Thank you Toofuzzy. That is sound advice. I think I will start with 60% cash and 40% equity in the IVE fund. Usually when I buy stocks they drop. So watch out everyone!
TD Ameritrade has 100 ETFs you can trade for free. SIGN UP FOR THAT. Choose what to invest in from that list, mostly the Vanguard ones.
Anyone who says they know which way the market will go is either a fool or a lier. So invest now knowing the market may/ will pull back.
The V wave reccomends starting with 60% cash at the present time. That isnt bad advise. If the market pulls back you can handle a 60% drop, if it goes up at least you are partly invested.
I would always start with 50% cash unless it is really obvious we are at a time like 2003 or 2009.
Hooe that helps
Toofuzzy
Hi Toofuzzy,
I have a TDameritrade account. So I am good there. I am just nervous about buying while the sp500 and dow are at record highs. Should I wait for a pull back?
First pick a broker.
TD Ameritrade, Fidelity, Vanguard, etc
Each will have certain ETFs you can trade for free.
Compare fund operating cost and chart compared to index and decide.
I shares, Vanguard, and others have s+p 500 funds
Put 10,000 in fund and 10,000 in money market account.
Before you do anything decide what you want to own for the rest of your life. You will gradually
add those funds as you have more money. Diversify by style or industry. Invest in the worst ones first. For instance energy is down now if you were diversifying by industry and energy was one of the sectors you eventually wanted to own.
It takes more funds to diversify by industry than style.
Toofuzzy
Hi KH, Re: S&P 500 Index Funds...........................
The least expensive on an annual expense basis are usually from Vanguard. They have both traditional mutual funds and exchange traded funds from which to choose.
Hi Toofuzzy,
Thank you for the advise. Any sp500 index will work? I have the 20k covered to invest.
Welcome KH, I see Toof has already replied to your question.
Over on the main AIM topic board you'll find something called the v-Wave. It helps one to focus on an appropriate cash reserve amount for either diversified investments (broadly based mutual funds, etc) or individual company stocks. The two have generally different risk levels and hence different starting and ongoing cash reserve requirements.
Mr. L used a "One Size Fits All" approach to cash. The v-Wave is a reasonably successful attempt to improve the fit over his approach.
As far as stocks or funds, the world is much changed since the original AIM manuscript was published. AIM will help any investment given enough time. Diversified mutual funds have lower volatility than do business sector exchange traded funds and lower yet than individual company stocks as a general rule. AIM likes healthy and profitable volatility capture.
So, much depends upon the makeup of your nest egg. If it is substantial, you can divide it into many more AIM managed pieces than if it's just a starter AIM account.
The changes were made after a long market upturn. Of course after 2000 you would have wished you started with more cash.
I use Aim so I dont have to time the market. Stick with the standard settings, 50% stock, 50% cash, 10% buy and sell safe, and 5% min buy.
Regarding what to own. Individual stocks can go to zero, use ETFs or mutual funds instead.
I dont know if you are aware that in order to have a $500 min trade, you need to start with $10,000 stock and $10,000 cash. Ultimately you want to own everything but if just starting out maybe a s+p 500 fund and a money market account. Later on you can add small cap, foreign, REITS, and then a long bond fund when rates peak.
Just my thoughts
Toofuzzy
Hello,
I had read Robert Lichello's original paperback a while back. However, I had lost the book in my latest move. The advise in the book was to use the 50/50 ratio. I see that newer copies now talk about using 67/33 and 80/20. Can anyone offer advise on what stocks/funds to get started with? And what ratio should be used for a beginner? Any advise would be welcome.
Q.......
Hi Tom,
Some time back I think I recall you stating that you use zero percent safe on the sell side. Do mind explaining why you decided to go with zero as opposed to the standard AIM 10%?
Thanks, Alton
A........
Hi Alton, Re: Zero Sell SAFE..............................
Several things were happening during the time when I made the decision to shift the SAFE to the Buy side and away from the Selling. Initially, I used Mr. Lichello's 10/10 SAFE and that worked pretty well for most growth stocks. During the '90s with the bull market still racing along I experimented with the concept of Split SAFE to see if one could tilt AIM towards either accumulation or distribution.
Staging all the SAFE to the Sell side made AIM buy more aggressively in declines after the first buy. This is due to the feedback to Portfolio Control (PC). Switching the staging of SAFE to the Buy side had AIM buying and adding to PC in pretty much the regular way in sequential buys. Sell signals were generated any time the value of the equity rose above PC by at least the minimum order size.
Overall, there wasn't much difference as the total SAFE was still 20%. But if one dropped below 10% Buy SAFE, then there was a modest acceleration of the cash burn rate.
Enter the 'vealie' or the action of adding to PC by 50% of the value of a rejected Sell order.......
The idea of the vealie was to say "Enough" to selling when one had sold enough shares to build the cash reserve to a suitable level. Just not selling did nothing to raise the "next buy" price and only left the AIM model with unsatisfied Sell market orders every period. So, the vealie idea was to slowly advance Portfolio Control which in turn slowly lifted both the "next buy" and "next sell" prices even without selling. Let me state again, this was only done when the cash reserve had been built up to a suitable level relative to either a fixed maximum or a moving benchmark similar to the v-Wave.
In a sense, the 'vealie' added resistance to the Sell side and possibly substituted itself for the Sell side SAFE. If the vealie was going to function to resist selling too much too soon, then SAFE on the sell side became redundant.
Along came Exchange Traded Funds. They could be purchased for entire business sectors and today we can even subdivide those sectors into smaller sub sectors. These has more volatility than diversified mutual funds but less than individual company stocks in general. The Total SAFE range of 20% was a bit large for most business sectors. That level plus 5% minimum share orders on buying and selling tended to have AIM miss a number of "round trip" type events (profitable volatility capture events).
I'd already used reduced total SAFE on some dividend payers and other lower BETA stocks with success. So, I took the same idea to the ETF world. There I could have a smaller Hold Zone or Lichello Band between buying and selling so as to capture more of the round trip events. Reducing the SAFE to 10% on the Buy side and zero on the Sell side worked quite well for most sector ETFs. To inhibit accumulating too much cash, the 'veale' was added as a final measure for ETFs. This general formula has worked well on ETFs for well over a decade.
As a final note, along the way I decided that a 30 day wait period between sequential buys tended to work pretty well to conserve cash in a long decline and provided a reduction in trade expenses and many times a deeper discount on the next buy. Here the idea was that if you are going to limit the cash buildup on the Sell side with vealies, then you should do something to conserve that precious cash on the buy side. If one doesn't use vealies, then there probably isn't as valid a reason to limit frequency of buying sequentially.
Hope this helps.
Best regards,
Hi SF
That is using standard AIM
A security needs to move 15% for your first trade. That could take a year, think about it.
If a stock keeps moving in the same direction it needs to move another 5% for the next trade. That could take as little as a month, and in a strong or shitty market you may have a run of trades.
When the price swings from low (buying) to going higher (selling) or the opposite it needs to move 30% to have a trade. Again you may have a wait of a year or two for a securitybto move that much, but that is where you really make your money with AIM, and it takes the emotion out of that trading decission.
The Zig zag is just one of the things like a moving average or SAR that you can choose to overlay on the chart. Look at the pull down menues below the chart on the left.
The only reason to look at it is to judge the volitility of something or if you wanted to get fancier (which I dont reccomend) with the AIM settings.
Tom gave you a link to the QUICK AIM CALCULATOR. You can use that to check your work.
PORTFOLIO CONTROL = starting stock investment , it increases by 1/2 of what you BUY
SAFE = 10% of current stock value
Min order size = 5%
The above is for standard AIM
PC - STOCK VALUE = X
X - 10% of stock value = order size
If order size > = 5% of stock value then buy order size
STOCK VALUE - PC = X
X - 10% of stock value = order size
If order size > = 5% of stock value then sell order size
Increase PC by 1/2 of amount purchased for next trade.
If the above is new to you, you need to reread the book. Look at the page where he has columns set up for the calculations.
Toofuzzy
Hi Allen, Re: Price Moves for AIM "by the book", etc..............
The ranges Toof mentions are approximately what you get using the standard AIM settings. If one is using a minimum transaction of 5% and 10% SAFE, those are additive as divergence from the Portfolio Control value. So, standard AIM trades occur when stock value is approx. plus or minus 15% distance from Portfolio Control (PC).
AIM-Hi actually would create a larger hold zone. It starts with the same SAFE of 10% but looks for 10% minimum trade size. This pushes the distance from a buy to a sell to nearly 40%.
Toof is correct that once you've reached either a buy or sell threshold and traded, the next sequential minimum trade in the same direction is about 5% difference in price from the latest transaction. With AIM-Hi the next sequential minimum trade would be about 10% away from the last trade price.
The next "opposite" trade (sell after a buy or buy after a sell) requires the value to change by a significant amount. It's close to 30%, close enough that we use that as a benchmark. This means that if AIM has you buy an additional 5% shares, it will want close to a 30% gain on those shares before it will ask you to sell them. (30% LIFO gain) Again, in AIM-Hi, that distance is nearly 40%.
In Stockcharts, you can set the Zig Zag parameter when setting up their graphs. You need to look down at the "Chart Attributes" section and the "Overlay" sub section. Here's the settings I generally use to view a stock or fund:
The W%R is found under "Indicators" as is the Accum/Dist setting.
I set the chart to Weekly data, HI/LO/Close for the indicator, 26 weeks simple Moving Average, Zig Zag 30, W%R 14 and below the graph and Accumulation/Distribution at 14 and below the graph.
This gives me a pretty good idea of whether a particular investment will have the Frequency and Amplitude of price change to drive the AIM engine.
Here's AAPL with the same settings:
Note the first example has far more frequent reversals. The second example has large enough price moves but they tend to be of longer duration and with fewer reversals. Both offer AIM trading opportunities. One has smaller, more frequent reversals (or round trips) while the other would present several sells in a row followed by several buys in a row.
Zig Zag setting of 30 means there has been a move of 'at least' 30% before a reversal was seen. This means it might actually move well beyond 30% in one direction because there hadn't been a 30% reversal seen. For AIM this means there might be multiple sequential buys or sells before a reversal of the trend changes the activity.
Hope this helps,
Hi TooFuzzy,
A looong time ago you said:
That's what I've being doing on the share centre and its gone okay for a few weeks but I don't want to play around with fake money I just want to start in reality.
>>>>>So what should I do I I want to buy 30 shares of a company valued at $4 ? Would it cost $120 and the brokers fee of $12 totalling $132 because I have a feeling it might rise and if not its okay because I have saved most of my money from it.<<<<
The worst thing that can happen to you at this point is that you will be successful.
Not only will you think you are smart and know what you are doing but you will think you are beautiful also.
Don't be in a hurry to lose your money. Practice paper trading. You have time to go thru a whole economic cycle doing that. It will be VERY instructive.
Toofuzzy
So what should I do I I want to buy 30 shares of a company valued at $4 ? Would it cost $120 and the brokers fee of $12 totalling $132 because I have a feeling it might rise and if not its okay because I have saved most of my money from it.
>>>>Ill check it out and what if I want this small amount of money to be invested in a company which in a year will do better therefore raising its stock value and me selling it then buying a car with that money. Would that be a good thing?<<<<
1) DO NOT BUY INDIVIDUAL STOCKS (even I don't have enough to be properly diversified)
2)The seventh largest company at the time (Enron) went bankrupt. Many "smart" people were still holding the stock as it did that, including employees who should have knowledge of the company.
3) IF YOU NEED THE MONEY WITHIN FIVE YEARS YOU SHOULD NOT INVEST IN SECURITIES.
4) If after reading about AIM you like the system, even AIM has you keep 50% of your assets in cash to allow you to buy at lower prices.
Toofuzzy
Ill check it out and what if I want this small amount of money to be invested in a company which in a year will do better therefore raising its stock value and me selling it then buying a car with that money. Would that be a good thing?
>>>>Does that also work in TD Europe? And what if I want to raise money for a car around £1000-5000<<<
I assume you are asking about the no fee trading. You will have to check. I only know about the US.
You should not invest anything you might need within five years.
Toofuzzy
Does that also work in TD Europe? And what if I want to raise money for a car around £1000-5000
I use TD Ameritrade also. In the United States they have 100 ETFs that you can trade for free as long as you do not trade more than once/ month.
Pick a Large Value fund as your first fund. (but only with money you do not expect to need for at least five years)
Toofuzzy
That sounds great thank you guys for the advice I'll keep you posted on my progress and my TD account is nearly finished being made and hopefully I'll start with the AIM and build my way up.
Happy investing guys !
Hi C, Re: AIM and Investing versus periodic savings plan........
Some confusion always seems to occur relative to AIM. If you divide one's thinking into two areas, it helps. One area to think about is a nestegg that has already been accumulated. AIM is a creation for that sort of investing. In other words, it's a management tool for taking care of an established sum of money.
The other area to think about is the "accumulation" phase. We all essentially started with zero money to invest. It may take years to set aside enough $$$ to build up an account that AIM can manage. So, there are other ways to work one's money during the accumulation phase.
LostCowboy mentioned Twinvest and Synchrovest as two methods of accumulating $$$ over time. Those are for systematic accumulation and investment. Both attempt to be the granddaddy of them all, Dollar Cost Averaging (DCA). DCA is also a systematic accumulation method. It's simple/stupid but works better than your average emotional investor. Twinvest and Synchrovest both can do as well or better than DCA over time with less risk. All three are meant for the person who can set aside $50 or $100 or $??? each month or quarter to build up a sum of money to be managed.
AIM kicks in when the sum of the accumulation phase becomes large enough to justify the internal trading costs of management. As Toofuzzy mentioned, it is usually considered to be a sum of about $10,000.00 total of investments and cash that will justify AIM being the manager.
So, while you are in the accumulation phase you can take this year's 300 Pounds and start building a diversified portfolio for yourself. Let's say you decide you want a global portfolio that is partially "income" producing and partially "growth" oriented. Take this year's contribution and invest in a mutual fund or exchange traded fund that satisfies a part of you eventual overall plan. Next year, after you've accumulated a bit more, buy the next piece of the investment plan. Etc. In 5 or 6 years you'll have a portfolio that is well diversfied and satisfies your overall long term mission and portfolio design. This will be your "Core Portfolio."
By the time the core portfolio is built, you'll probably have accumulated enough that the total can be turned over to AIM for management. So, you are in Phase One - Accumulation now. Buy one piece of the overall Core Portfolio this year. Eventually you'll reach Phase Two - Management of that portfolio and will use AIM on the whole of it.
Best regards,
Aim is a wonderful formula for investing, it reduces risk and removes emotion. Play around with AIM with paper and pencil for awhile and get comfortable with it. You can get historical prices from Yahoo and plug in monthly prices for any security. You will understand why you need a bigger account size to get started and for it to make sense to use.
Keep in touch
Toofuzzy
Hi Chiffle, I can see that you want to get started. Robert Lichello made two plans for small investors like yourself and me, one is in his AIM book, it is called twinvest. The other plan is called Synchrovest, he wrote about it in his first book called Superpower investing. Another book you should read is called Value Averaging by Michael E. Edleson.
Here is the best web page I have found that explains it, but you really need to read the book.
Value Averaging
If you want to know more about the different forms of periodic investing feel free to come by my forum.
So I would need to make atleast 10,000 before I start? It makes sense and I get what you are saying but if I've just about got £300 from summer holidays how will I get the rest. Unless I buy preferred stocks and get payed annually whilst Im in school.
Stay away from individual stocks, Invest in funds in your own country, and take Clives advise.
You asked for our advise and you are not listening!
Individual stocks can go to zero, you have currency effects with stocks in other countries, and you have tax rules on foreign stocks you have to deal with that make taxes more complicated.
Toofuzzy
>>>>I'm 16 I any raise that kind of money wouldn't it be better of me to use all this money and buy as much shares into one company as I can then if it doesn't work I will save up again then buy into another company and atleast that way I have shares of different companies over time and could earn small amounts of cash<<<<
I liked Clive's response better than mine and deleted mine.
Toofuzzy
Thank you for that although would you recommend me buying company "x" for 40 shares at $4.12 on the NYSE as it is a blue chip and if I keep it until I am 18 then progress further with returns of dividends and work. Would that be wise ?
Hi Chiffle,
Investing £300 in stocks may involve incurring a £12.50 cost to buy (brokers fee), on top of which you'll have to pay 0.5% stamp duty. The market maker will also take a slice out of that (difference between the bid and ask prices). 5% of your money will disappear in just having bought some stocks. That's a hefty overhead. If later you need to sell those shares the round trip might have cost you 10% of your savings assuming the share price remained unchanged, worse if the share price had declined.
I'd be inclined to build your savings in a safe cash deposit account for the time being. You're young and will likely need some cash to hand relatively soon (next few years) and stocks are really only suitable for longer term investments (10 years+).
Gaining experience with stocks however is a valuable lesson, so perhaps rather than actually trading with real money, try paper trading (pretend money) for a while, looking into the actual costs involved, reading company reports etc. - which will stand you in good stead for later years when you perhaps have more surplus amounts that you don't mind locking up for the longer term.
You're definitely on the right track by getting into a savings habit from a young age. Over time I suspect you'll do well.
Best. Clive.
I'm 16 I any raise that kind of money wouldn't it be better of me to use all this money and buy as much shares into one company as I can then if it doesn't work I will save up again then buy into another company and atleast that way I have shares of different companies over time and could earn small amounts of cash
>>>>I only have £300 and I can't excatly get much more now but am I allowed to buy 10-20 stocks of a company with £4.20 per stock. Would that be a good start ?<<<<
You need to have an emergency cash account. You don't EVER want to HAVE to sell a security.
The cash account should be enough to live on for six months. If you save 10% of your salary, it will take you FIVE YEARS to save that! SAVE MORE It is the only way to get ahead. If you ever work overtime, don't spend it! Pretend it doesn't exist! If you get used to spending it, when they take it away you are used to having it to spend and will be screwed.
Sounds like you are in England
When you do start
1) Use Exchange Traded Funds (use this time to learn about them)
2) Your first fund should be a LARGE VALUE FUND based in your home country
In the United States that would be an S+P 500 Value Fund for me. Not sure what is available to you.
3)7000 lbs stock and 7000 lbs cash to start AIMing (about $10,000 each US Dollars ) unless you use LD-AIM In which case you can start with 3000 lbs stock and 7000 lbs cash (you pretend you are AIMing the 10,000 lbs stock )
Not LOSING money is just as important as making it.
Toofuzzy
I only have £300 and I can't excatly get much more now but am I allowed to buy 10-20 stocks of a company with £4.20 per stock. Would that be a good start ?
>>>>How much do you reckon I should because I have near enough 300 now<<<<
?????????????????????? 300 WHAT ?
I don't start an AIM account with less that $10,000 in stock. A minimum trade is 5% or $500 If you made 15% on your first trade that is $75 If it cost you $10 for the trade you made $65
Figure it out
Then you really should start with $10,000 in cash also.
Hope that answered your question
Toofuzzy
Hi C, You might want to consider the concept of LD-AIM for your management. It allows for a substantially smaller initial investment than typical AIM.
http://web.archive.org/web/20120614135045id_/http://www.aim-users.com/aimlodown.htm
We've been having some discussion about LD-AIM on the traditional AIM Users board here on i-Hub.
This still doesn't mean you shouldn't do some research into what your initial investment should be. Remember that NOTHING can save you from making a bad choice.
Three things are usually considered the basics of investment goals:
1) Price Appreciation over Time
2) Dividend Capture over Time
3) Profitable Volatility Capture over Time
AIM is a method for implimenting successfully #3. It works fine with either #1 or #2, but those shouldn't be ignored. Note the inclusion of the word "profitable" in the Volatility Capture item. Not all trading programs are set up for such positive goals.
In that #s 1 and 2 are important, avoid penny stocks if you can.
Buy quality when ever you invest and then let AIM guide the management of the investment.
Best regards,
How much do you reckon I should because I have near enough 300 now
>>>>Have I forgot to mention I'm 16 and that money was from a summer job and summer is nearly over<<<
Yeah you left that out.
Like I wrote, AIM is hard to do with a small amount. If you can add to it regularly, look in to Twinvest or Syncrovest.
But maybe, like I wrote, the right thing is to just put it in to savings till you have more to invest.
Toofuzzy
Have I forgot to mention I'm 16 and that money was from a summer job and summer is nearly over. Also I know I shouldn't start so early but I think I am ready and A.I.M seems the more probable decision for me atm . Am I right ?
If I am correct 200 is less than 300 dollars.
1) if that is all you have it should be in a savings account for an emergency.
2) You should make a commitment to yourself to put aside 30% of your net income. In the United States I would say 30% of your gross income but I assume your taxes are about 50% of your income.
10% should go to an emergency fund (bank account) It will take you five years to save up enough to live on for six months
10% should be set asside for retirement (this assumes you are in your early 20's ( You need to set asside more if you are older) This will go in to stocks and be AIMed eventually.
10% will be set aside to do the things you would like to do annually like a vacation or buy some big ticket item.
AIM has you trade 5% of your holdings. You do not want those trades to be too small. It just isn't worth it. So you would want to start AIM with about 6500 british pounds in stock and an equal amount in cash. (About $10,000 US dollars each) So your trades will be a minimum of 325.
You also want to stay away from individual stocks. You are buying as a security goes down and stocks can go to zero. Stay with funds. In the US we have what is known as Exchange Traded Funds. They trade like stocks thruout the day and you know what price you are getting unlike mutual funds which price at the end of the day. (though mutual funds are better than individual stocks)
Deside what you wnat to own for the rest of your life. That might be Large Value, Small Value, Foreign, Reit (real estate), and a bond fund. As you have enough funds you can start a new AIM account in each fund one at a time every year or two. Buy the one that has done the worst in the prior year that you don't yet own.
PS: Yes I own and AIM individual stocks and I am gradually getting out of them and simplifying my investments. I have had more than one go bankrupt.
Toofuzzy
It's my first ever time investing in stocks and I need to know whether A.I.M (penny stocks) or blue chips is the way to go but I have only £200 so far please help those who wouldn't mind I would greatly appreciate it.
Jas Dhanju
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