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Hi Cindy.
One option that you might like to consider is to drive volatility.
For example you might use the vWave stock/cash indicator to create your own virtual Index comprised of part DDM (2X Dow) and part conventional Dow (1X), with the vWaves stock element representing DDM exposure and the cash representing 1X Dow exposure. So if the current vWave was 79% stock, 21% cash the virtual index would be allocated 79% DDM and 21% DOW (for an overall equivalent of 179% stock exposure). Unitise the combination to produce a current (virtual) value, and update over time.
At your review date, first update the virtual index unit value and then apply AIM (part stock, part cash) to that in the normal manner (adding or reducing to/from real DDM/DOW holdings when AIM indicates a trade).
Its an additional layer to manage, but not that difficult, and I suspect you'll find the effort worthwhile.
I'm personally using something along this line for my speculative element (around 10% of my total fund value, against which I've estimated and target a 20% to 40% p.a. return), but in a more aggressive manner and on a day trading basis that primarily only targets volatility capture benefits alone (little/no regard to price appreciation capture benefits).
Best. Clive.
Re: Benefits of diversified investments vs benefits of individual stock volatility...............
Dear Cindy, Excellent question. As a diehard stock picker for decades, it seemed an easy question to answer back in 1992. Back then there were no such things as ETFs (but there were closed end funds). The usual Mutual Fund was diversified across many different business sectors as well as diversified by multiple holdings in each sector. These were very bland investments for AIM. At best they followed the trend of broad market indexes - at worst they never managed to do as well as the indexes. So, the decision was pretty easy. Only if an account was very small in value did one use mutual funds with AIM.
If an account was large enough, then one could single out companies from a variety of business sectors and then have at least some diversification even if one had very few holdings in each sector. "Single Stock Risk" still played havoc with such portfolios, however.
With the advent of exchange traded mutual funds and specifically business sector funds the issue got a bit more cloudy. With Sector ETFs we gain a lot of diversification in numbers of companies in a sector. With multiple sectors we gain diversification similar to what a traditional mutual fund might have.
Yes, there's decreased intra and interday volatility with ETFs but we reduce "single stock risk" by a substantial amount. The sectors still follow a trend and the best stocks in that sector with be the trend leaders on the way up. If the market gets frothy, sometimes those best stocks will also be the ones leading the sector downward if they've become overbought during the rise.
So, since Mr. Lichello's model doesn't trade all that frequently when relatively standard settings are used, we don't miss that much "action" using ETFs.
Think of using an ETF sector fund as being an excellent filter for Signal To Noise. It tends to decrease the noise and therefore make the true signal more apparent. With AIM and ETFs the trend is what is going to be the dominent activity generator. You can expect multiple orders in the same direction rather than a lot of reversals. A typical pattern would be a bunch of buys, like what would have happened in 2008, then followed by a long series of sells.
The net effect in the long term tends to improve overall returns by reducing the number of severe losses. Think of it as taking three steps forward and only on back while an individual stock might take 4 steps forward but then two back.
Of course, if we now see 10 years of cyclical market with essentially zero slope, AIM will improve overall returns because of capturing whatever volatility occurs. In some studies I've done, AIM and a well selected group of very mature and high dividend paying stocks did better than owning a bunch of very high BETA stocks in total return. Again, these stocks didn't trade often, but quite effectively. Along the way there were also dividends collected.
So, I hope this helps a bit. ETFs transformed my own efforts as an individual investor. I own very few individual company stocks any more. ETFs and CEFs are all that I currently own in my IRA, for instance.
Best regards, Tom
I am new to AIM and have read the boards and Lichello's book. Does the decreased risk in using sector ETF's outweigh the increased volatility of individual stocks in terms of the effectiveness of AIM? I have spent much time comparing the charts of ETF's and stocks like WMT, JNJ, and XOM and have wondered how the smoothed ride affects the profitability.
I am exhausted trying to decide which investments are going up and losing money on most decisions. AIM seems to be a better way to take advantage of lower prices and the possibility of trading ranges for the future. Thank you for sharing your experiences. Cindy
Hi Lisa, Re: Corp paper and the future...............
Corporate paper certainly was nicely discounted over recent months. With that so were corporate bond funds. Years ago when I used to buy individual corporate bonds, this was when I liked to be doing my buying - when the discounts on the paper were the greatest and the effective yields were also very large. So, in buying corp bond funds (and preferred funds) we're essentially doing the same thing.
There's a greater chance of some of the paper defaulting than other times, but that has been priced into the funds. This also means there's a good chance for some capital appreciation along with cliping some nice coupons along the way. The deepest discounts are in the Corporate and REIT areas right now. Govt. paper, depending upon average duration isn't discounted much at all. In come cases the longer govt bond funds are actually selling at a premium to NAV and to the papers' value at maturity.
So, assuming the folks at Calamos and other funds have been doing their homework, they should have positioned these funds for a nice future.
A significant portion of my overall portfolio is committed to such funds, as I use them to pay my living expenses. I add to those positions when there's a lull as in the last 15 months so that my income keeps up with inflation. Sometimes many years will go by with the yields and Premium/Discounts in an area that's not very attractive. So, we need to make Hay while the sun's shining.
Best regards,
Tom
Hello Tom,
As you've undoubtedly observed CHY has been moving nicely higher since the low on 12.15.08. What next do you suppose?
Care to make any forecasts, speculations, etc.? Are high yields and convertibles the way to go, at least in part?
Best wishes for the season and the New Year!
Tom, I did some additional testing of my theory last night and saw what you describe. Whenever I went full cycle and returned to the original price it looked good but an up or down bias favored one of the two funds.
I appreciate you comments and insight.
John
Hi J, Re: Inverse funds...............
There are some "non leveraged" ETFs that follow various indexes on both the bull and bear sides. Essentially 1X funds. This don't have the high expense ratios that the 2X funds have which should help to improve overall performance if you are to try this.
Given enough full cycles, such an idea should work. However, to be "best" it would require complete reversion to the mean periodically with no advance in the overall long index values over time. While we do have periods of essentially "flat" markets (range bound is a better description) the historical trend has been upward. So, the "short" fund would be betting against the long term trend and therefore never equalling the "long" fund. Potentially the short fund, after a few cycles, could use up a greater portion of the cash reserve than it manages to return. This could create an imbalance that might never be recovered.
If one saw the onset of a major macroeconomic change (such as the advance of socialism as the main engine of the U.S. economy) which would create a long term range bound market, then working the two funds against each other would work well.
Best regards, Tom
Best regards, Tom
Blended account using inverse ETF's.
I would like to expand on a question I had a few posts back. I am new to AIM so this may be really stupid but it seems to me that using inverse funds could help performance. For example - I have 30,000. I put 10,000 in QLD and 10,000 in QID, and 10,000 in cash. I would track each separately but use a common cash account. When one is selling the other should be buying so cash flow is fairly flat. The preliminary test with a spreadsheet looks promising.
Does this have potential or is it a stupid NEWBIE idea?
In reality I would not use a 2x fund but I haven't had a chance to research to see if there is an inverse fund that is not 2x.
Any comments are appreciated.
Hi jmp
>>>>Thanks for the reply. I just got the 3rd edition of Lichello's book today and will be reading up on AIM. Is there a minimum or maximum weekly or monthly volatility I should look for in an AIM stock?<<<<
No not really. I happen to like ETF's as apposed to individual stock because ETF's can not go to zero (I hope >grin<)
I would either diversify by style (large, small, foreign, bond, etc) or by industry.
If by industry I would pick industries you believe will do well over MANY years (even if not now)> Look at Tom's writeup on his original retirement account picks.
Having said that healthcare has not been very volatile over MANY years while biotecnology might be a better pick.
So maybe some picks like
Finance (yea I know but at least we can hope they are at a bottom)
Biotechnology
Technology (of some sort)
Energy
Minerals (another industry that has to come back eventually)
Consumer PRODUCTS (as apposed to stores, I personally hate retail)
S+P devides the S+P 500 in to 10 (I think) broad industry groups, You can either use their funds (will only hold the 500 large caps though) or just use that as a guide as to what to pick from using I-Shares ETF's for instance.
By the way. Let's say you want to own 6 industries ultimately but "only" have $30,000. You could set up AIM accounts with 2 of them ($10,000 stock and $5,000 cash each 10% SAFE, 5% Min Order size) and then add another fund every year or two or three as you have additional funds.
I would stay away from all the tweeks to AIM for now. You have enough to learn. Low Down AIM particulary will have you sell completely out when the market "eventually" rises.
Hope that helps
Remember I am
Toofuzzy
Thanks for the reply. I just got the 3rd edition of Lichello's book today and will be reading up on AIM. Is there a minimum or maximum weekly or monthly volatility I should look for in an AIM stock?
>>>>I have recently discoverer AIM and have a question. Would AIM work well with a pair of ETF's like QLD and QID? If I set up 2 accounts at $10,000 would the results cancel out each other since the funds move opposite each other?<<<<,
If you Aimed them separately it would be OK but using one as the cash side for the other is definately not a good idea.
You don't need to chase volatility though. QQQQ is volatile enough.
Also the 2x funds and negative funds do not mirror the index in the long term for some reason.
An Idea of mine:
Start AIMing QQQQ (or whatever other index you want) with 30 to 50% cash NOW! and when the cash level goes way up (probably at the next top) after you have had a whole string of sales, at that point start AIMing an inverse fund as a separate account. Hopefully at that point one will be sucking money and the other will start spitting it out.
Toofuzzy
I have recently discoverer AIM and have a question. Would AIM work well with a pair of ETF's like QLD and QID? If I set up 2 accounts at $10,000 would the results cancel out each other since the funds move opposite each other?
Re: Calamos CEF Dividend Cuts.............
Thank you Lisa for keeping us informed. Here's another link on Calamos' action:
http://biz.yahoo.com/prnews/081103/aqm121.html?.v=51
It was expected, but that doesn't necessarily soften the blow. I think it's pretty well priced into the stock. We'll see how the market reacts tomorrow.
Best regards, Tom
Calamos reduces monthly dividend for closed-end funds (CHI, CHY, CSQ, CGO and CHW):
http://www.marketwatch.com/news/story/Calamos-Closed-End-Funds-CHI/story.aspx?guid={D7D14380-6831-4417-AE20-B2C807D06BCB}
For CHY that's a 30.27% cut!
Hi Lisa, It's been a beautiful Fall here in the middle west, too. It might be too soon to declare that we've put a floor in for CHY or any of the closed end funds, but it seems like the footing is firmer now.
Both CHY and its sibling CHI have excellent yields. Dividends are going to have to be watched carefully. All the closed end funds are having trouble selling their "preferred" shares on which they depend.
Best regards, Tom
Well, Tom, CHY was up nearly 13% today!
What do you make of that very large one day move?
Enjoying our Native American summer here in Northern California.
Thanks Bob, Those are a good start.
Have a great weekend,
Tom
Tom,
Here are some I look at.
IWM >> UWM (2X)
SPY >> SSO (2X)
QQQQ >> QLD (2X)
DIA >> DDM (2X)
Regards,
Bob
I found Proshares has some bull and bear ETF leveraged items.
http://www.proshares.com/funds/sso.html
It's a 2X S&P500 fund.
Best regards, Tom
Hi ALL, Re: Leveraged "Bull" ETFs; 1.5X or 2.0X?............
What are some symbols for some leveraged bull funds in ETF form? I know there's some around, but can't remember who sponsors them.
Best regards, Tom
Hi Tom Re Riskgrades
Thanks for the reply. The bar chart you had seemd to show the overall risk as zero and I had trouble getting the chart to come up.
Toofuzzy
Hi Toof, Re: Riskgrades for my IRA..................
It's through the roof right now showing all components in triple digits with most near or above 200.
Also, it's now inaccurate because for some reason DLS isn't showing up in their database. However, while this account has been pretty neutral on risk over time, it is now looking like a nuclear power plant without water circulation!
Another part of the very high riskgrades rank right now is that zero cash position. The 100% invested profile now does nothing to moderate the overall risk. Still it's showing a "diversification benefit" of 50 out of 209.
Usually most of these components are moderate in the riskgrades assessment but the unusual market conditions right now skew the charts a bit. What is odd is that it is currently showing my portfolio as being only 34% as risky as the stocks of the S&P 500. I'm not certain that all the functions of RiskGrades are working at this time.
Best regards, Tom
RE RISKGRADES
Hi Tom
I was wondering what the riskgrade of your IRA portfolio ends up being.
I was fooling around with 10% in ICF, EEB, GLD, EFA, IVE, IWN, and 40 % in CHI and the riskgrade was quite high. Putting half of CHI in TLT lowered it quite a bit but still high. (I was trying to mimic your IRA with ETFs and fewer funds)
Another portfolio 15% in IVE, IWN, EFA, ICF, and 40% in CHI was also quite high. Any thought as to what you would add to this second portfolio and what you would reduce?
Just playing around.
PS: Is there a way to find an asset class to add other than by trial and error?
Toofuzzy
Hi Tom
I added some shares of CHI to my IRA. I am looking to add some additional in my taxable account as that is where I have some funds. I was hoping it would drop this morning with the agreement falling apart. No such luck. May try to add some shares at $10.50
I wonder what it will take for CHI to recover? Does the income exist to cover the dividend or are they just returning capital based on their payout policy.
Toofuzzy
Hi TF, Re: Owning both CHI and CHY..............
There's no diversification benefit or at least not much, but sometimes one is selling at a higher yield relative to the other. CHI has greater leverage and therefore greater volatility which has, in this environment brought about a nice premium in yield over CHY.
It's only in a couple of accounts where I own both.
Best regards, Tom
Hi Tom
>>>>Everything I see indicates the market has more room on the upside than the downside right now. Maybe once we get all the "bad boy" syndrome over with maybe we can get back to business as usual.<<<<
That would suit me fine!
Any thoughts on CHI?
You seem to own both CHI and CHY. Do you feel there is some diversification there?
Toofuzzy
Hi Toof, My retirement account is now fully invested and awaiting further distributions from the "income" side of the account. Then we can continue the downward averaging if the prices remain favorable for accumulation.
Everything I see indicates the market has more room on the upside than the downside right now. Maybe once we get all the "bad boy" syndrome over with maybe we can get back to business as usual.
Best regards, Tom
Purchase today
My dividends posted today in my IRA so I was able to buy 13% of the shares AIM wanted of CHI. Current dividend 16% yield. Wonder how long that will be.
Past buys were at $17 and $14 and this one at $10.29. Was tempted to wait a few more days to see if it would continue to drift lower but decided to not be greedy.
Not having money got me a nice discount to what AIM would have had me buy at ( $13.20)
Toofuzzy
Hi Tickettoride
You may want to check out FXA the Austalia fund. May not be the best time to invest as the exchange rate is going against them but the yield is very good. Might be good for AIMing.
I assume the swiss fund has a very low yield and you will be losing money to inflation unless the currency gets stronger against the dollar. Again if it swings enough ,,,,,, might be good for AIMing.
Toofuzzy
Hi Ticket, Re: Swiss ETF...............
I'm following one in a model portfolio; the one that Toof mentioned. FXF. It's a currency ETF, not an equity one. It positions the USD against the Swiss Franc and goes up and down with the changes in exchange rate.
"CurrencyShares" has eight different country specific currency ETFs right now.
Hope this helps,
Tom
thanks yes it is
i like the way the swiss think and in the end they may still be standing
Hi tickettoride
FXF may be what you are looking for...... or maybe not.
Toofuzzy
hello
if i may ask
Im looking for a swiss etf for the swiss money is there one ? do you know of it ?
Hi Tom
I didn't realize the connection between them and Lehman.
But it looks like all my fears for the fund were realized.
I added to my WRI holdings along the way and put in a GTC order to sell some the other day but it has since pulled back.
I am also taped out.... at least for the next few days.
Toofuzzy
Hi Toof, Yes, I did add to my NRO holding. However, I'm now tapped out in my IRA, so I think that's the end of buying until the next dividend checks clear!
Did you see the note they post at their web site now?
Neuberger Berman is operating as usual and is not subject to the bankruptcy proceedings of Lehman Brothers Holdings Inc. Our portfolio management, research, and trading operations are fully functional, and our portfolio managers continue to actively manage our clients' assets and will do so going forward. All mutual fund assets are segregated from Lehman Brothers and are held by the custodian, State Street Bank & Trust.
Best regards, Tom
Hi Tom
Did you manage to pick up more NRO in the latest swoon?
Toofuzzy
Hi TF, Re: NRO..............
The web site is pretty useless. However, if you dig deep enough you can at least find their reports.
1) It appears they do have realized cap gains, so I guess they did do some selling.
2) Cash as a % of assets currently is teensy.
3) It would appear their share price is not down significantly more than the average REIT or REIT Fund.
http://stockcharts.com/charts/performance/perf.html?IYR,WPC,NRO,JRS
But, it is down a bundle over the last 12 months.
4) Yes, it's a closed end fund.
5) It appears their payout was around $900MM last year while income was $2270MM. However, their Assets and Liabilities statement (Page 12) seems to create some more questions to be answered.
Best regards, Tom
Port Washington, WI 53074
Hi Tom Re NRO
Let me know what you find out.
OK they own real estate, all real estate is down, so I can live with that they are down also since they are supposed to own real estate.
1) Were they smart enough to lighten up on their holdings?
2) how much cash are they sitting on now as a % of their assets?
3) Are they down in stock price more or less than the average (REIT, REIT fund, or whatever you feel it is fair to compare them to)?
4) I don't think you told me whether they are a Closed End Fund or an open end? I went to their website and it had something about another fund being merged with it but nothing I could find about the fund itself.
Thanks
Toofuzzy
Hi Toof, Re: NRO...............
Funny we should be discussing NRO. Their semi-annual report just arrived in my email this AM.
https://www.nb.com/MYP/NB/PUB/16495/NFA/E/R/Q/V/doc/real_estate_income_fund_annual_report.pdf
Again on Page 12 there's some oddities I can't explain, but it looks far better than the previous report that I referenced this AM.
Best regards, Tom
Hi TF, Re: NRO NAV......................
The NAV has been tracking with the Price/Share pretty closely for a long time. The discount is there, but it's not a big one. It's as though the assets are declining in value at about the same pace as the share price. In theory "efficient" markets should reduce the discrepancy to zero, but we know that rarely happens with closed end funds.
Usually there's a premium or discount because of psychological aspects of the market participants. Right now they're not willing to pay as much for the assets as the NAV suggests. With price leading the decline, it indicates poor investor sentiment. This is similar to when the NAV leads the Price upward. That also indicates investors are less than enthusiastic about the rise in asset value.
When NAV leads the Price downward it indicates investors are optimistic about the outcome. This is similar to when the Price leads the NAV upward.
What may be a telling indicator is when the NAV starts to stabilize. Other market forces will determine that. Then, how investors react to that will determine the future Premium/Discount.
Best regards, Tom
Hi TF, Re: NRO.................
Those are all the right questions, but the answers are very hard to find. I think a large portion of the decline is "guilt by association" with Lehman Bros. these days.
(see
http://stockcharts.com/charts/performance/perf.html?NRO,LEH
and stretch the X axis to full length)
When one looks over their holdings, it looks pretty good. When one attempts to find their annual income per share vs their payout, it gets more difficult.
I'm continuing to investigate. On page 12 of their semi-annual report it shows significant realized capital gains. It also shows they are distributing more than the value they are receiving in income. At the time of the report, the excess distribution appears to be about balanced with "unrealized" capital gain. Much of that may have disappeared in more recent times as real estate assets have declined in value.
Then under Assets, it shows significantly higher dividends and interest receivable than it shows as payable under the Liabilities column.
So there seems to be a contradiction here. I'm going to call and see if I can get it explained.
Looking at it in an entirely different light:
It's been under "distribution" since last Summer and the beginning of the "credit crunch." It's also showing a very generous trade range in the last year. So, the confusion continues.
Best regards, Tom
Port Washington, WI 53074
Hi Tom Another thought
I think the main issue for me with NRO is that I would be happier if they weren't paying out such a large dividend. I could see buying it because of the price drop and their holdings are now at bargain prices. It would be nice if the discount to MAV was higher though.
Toofuzzy
Hi Tom Re NRO
Are they a Closed End Fund?
Have they sold off a bunch of assets on which they have gains they have to pay out?
If that is the case they are returning a LOT of capital in that dividend. Are you just going to end up buying a return of capital?
The NAV has declined 36.5 % roughly in the past year (see above) and the stock has declined significantly also. Is the price likely to keep declining in line with their dividend pay out (return of capital)?
They may have picked a good time to lighten up their stock holdings. Are their cash holdings extremely high now? If they return all that capital will they have the cash to invest back in the market in the future and grow the share price?
I had picket ICF to AIM and had switched that to LD -AIM and eventually sold out. When the price dropped enough for me to get in a few months ago I wasn't happy with the yield (3 to 4%) so I started looking at individual REITS.I don't think the other REIT ETFs yield much more. At the present time there are a bunch of REITS that have 6 to 9 % yields.
Right now I own WRI and have been following FUN but The dividend to earnings ratio has me nervous. If WRI goes to $29.44 I get another buy.
Toofuzzy
Neuberger Berman Real Estate Securities - NRO - declares distributions for July, August and September of $0.15308 per share per month.
http://biz.yahoo.com/bw/080627/20080627005546.html?.v=1
That works out to be just under 20% per year at today's share price. It's very difficult to tell if this is going to blow up or just continue on while the market "hates" it.
Best regards, Tom
Hi Enrico
Welcome. I am sure you will find a lot of usefull info on AIM here, on the other site, and Tom's website.
People have tries but I believe AIM will not work with FOREX.
The one risk of AIMing is that something you buy goes to zero. Therefore any kind of fund works very well with AIM because it avoids that risk (ETFs CEF closed end funds, and no load mutual funds)
There are a few currency ETFs which can be AIMed
fxa, fxb, fxc, fxe, fxf, fxm, fxs
You would buy them and put 50 to 70% of what you want to invest in them and the rest in cash in case it goes down.
I don't know you but the place to start is with a diversified portfolio of stock related funds. large, small, foreign, REITS, bond
Toofuzzy
Good Day, My name is Enrico I am brand new. I read Lichello's book several times. Could someone tell me explicitly, or point me to how I should proceed trading currency ETF's the AIM way. I have traded spot FOREX, but don't know at all how to proceed using AIM in that market. Any help will be gladly appreciated. I wanted to start a small acct. with $1000 to get an overall feel for the system. Thanks in advance
Tom, Do you know of an ETF or fund that invests solely in Euro Bonds?
CHI
Anybody have any thoughts on the below article other than it will create a buying opportunity? Any long term effect on the fund.
Toofuzzy
Calamos Releases Comment on Auction Rate Securities Market
Tuesday March 4, 5:00 pm ET
NAPERVILLE, Ill., March 4 /PRNewswire-FirstCall/ -- The failure of the closed-end fund auction process has permeated the entire closed-end fund market as liquidity providers have stepped away. Initially, failed auctions were limited to lower rated securities, but as liquidity disappeared, closed-end funds began to be impacted. Should the auctions continue to fail, common shareholders may eventually be impacted through lower distribution rates.
"The recent turmoil in the U.S. credit markets has spilled over into the auction-rate securities market and in turn, into the closed-end fund market. It's important to remember, however, that this is a liquidity issue, not a credit issue," said John P. Calamos, Sr., the chairman, chief executive officer and co-chief investment officer of Calamos Investments.
Each of the five funds that Calamos has outstanding has experienced failed auctions. Pursuant to the standard governing documentation on the preferred securities, a failed auction triggers a "maximum rate" as described in each prospectus. The fund shareholders will continue to receive dividends during this time. The maximum rate is a calculation, and an example of a rate for each of our funds is included in the following table:
Fund Ticker Maximum Rate Maximum Rate (as of
Calculation February 29, 2008)
Calamos
Convertible
Opportunities and AA Financial CP 4.473 %
Income Fund CHI multiplied by 150%
Calamos
Convertible and AA Financial CP 4.473 %
High Income Fund CHY multiplied by 150%
Calamos Strategic 7- Day LIBOR 4.706 %
Total Return Fund CSQ multiplied by 150%
Calamos Global 7- Day LIBOR 4.712 %*
Total Return Fund CGO multiplied by 150%
Calamos Global
Dynamic Income 7- Day LIBOR 4.706 %
Fund CHW multiplied by 150%
(*) Fund only auctions on Tuesdays, auction occurred on February 26,
2008.
"The failed auctions have created liquidity challenges for many closed-end funds, including the Calamos closed-end funds. While it is impossible to predict when the heightened uncertainty surrounding the auction rate securities market will abate, we remain confident in the fundamental positioning of the Calamos closed-end portfolios. As in all market environments, we continue to manage the funds according to a time-tested discipline guided by long-term perspective and proprietary research," said Mr. Calamos.
My retirement account's holdings are starting to make some progress even in this stinky market.
First up is the most recent one to trade - a world govt. bond fund:
Next is a precious metals commodity fund:
Last is the main "growth" item for the portfolio, the "timely stocks in timely industries" fund from PowerShares:
The international stock funds haven't done as well nor have the U.S. small and mid cap value funds. All but the CHY and PHY shares are new to the account as of November, so will take some time to get some history built.
Best regards, Tom
Hope it helps! I've been adding significant amounts of these high yielders since August.
Best regards, Tom
The advent of Exchange Traded Funds (ETFs) has brought a new way to use AIM on various Market Sectors. They offer an easy way to own and trade entire sector indexes without the expense and inconvenience of the typical open end mutual fund. Closed End ETFs (CEFs) offer yet another interesting alternative and some extra BETA because of their Premium/Discount range.
With AIM, we like to make our trades when the price/per share meets our requirements. With traditional mutual funds we never know exactly what the end of the day will bring - but that's what the basis of our our trade price will be. Using ETFs we can use "Good 'til Cancelled" Limit Orders to trade when our price is met, or trade any time during the day at the current bid/ask prices.
Diversified mutual funds usually don't have the ingredients that AIM likes - Frequency and Amplitude of price change. This is because their money is spread over many different business sectors of the economy all moving in their own directions. Individual sector funds look as though they will give us many more opportunities to capture volatility than do traditional diversified mutual funds. As this graphic shows, individual sectors perform well at different times in the economic and market cycles.
ETFs can be selected from a wide variety of industrial sectors, individual country funds and also from "value" or "growth" by size of capitalization. This offers us the chance to build a portfolio of our own that is easily as diversified as any mutual fund. If we use ETFs we preserve much of the frequency and amplitude of each sector that AIM uses for creating trading profits. Each sector seeks its own level while AIM adjusts properly for the changes. Overall the portfolio benefits from extensive diversification while also improving AIM trade related returns.
An interesting article on building the "ultimate buy-and-hold" portfolio can be read at:
http://www.fundadvice.com/articles/buy-hold/the-ultimate-buy-and-hold-strategy.html
Constructing an ETF portfolio using the component ideas mentioned in the article would give an individual a very well diversified portfolio. Here is my account compared to similar indexes over a year's time:
[chart]www.aim-users.com/UBH_vs_Index.gif[/chart]
GENERAL INFORMATION ON ETFs
http://quotes.nasdaq.com/asp/ETFsHome.asp
LOOK UP SPECIFIC INDUSTRIAL SECTORS AS ETFs
http://quotes.nasdaq.com/asp/ETFsSector.asp
POWERSHARES ETF SITE
http://www.powershares.com/
INFORMATION ON ETFs
http://www.etfguide.com/etftickerguide.php
MOST POPULARLY TRADED
http://money.cnn.com/funds/etf/mostpop/
HEATMAP OF ETFs
http://screening.nasdaq.com/Heatmaps/Heatmap_ETF.asp
SPECIFIC INFORMATION ON CLOSED END ETFs (CEFs)
http://www.etfconnect.com/
TOM'S RETIREMENT ACCOUNT BUILT WITH ETFs
http://www.aim-users.com/etfunds.htm
EXAMPLE OF NON-U.S. ETF PORTFOLIO
http://www.aim-users.com/exusetf.htm
MORE ON A.I.M. (Automatic Investment Management)
IHub - http://www.investorshub.com/boards/board.asp?board_id=949
Web Site - http://www.aim-users.com/
Best regards, Tom
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