AIM RE-bal

[Firebird400]

Hi Neal,
I too have missed reading your posts. You've had a lot of great ideas. We all have at some point on any of these boards. You are missed. I too use my own system I learned playing a game. I call it ATTIC. Best regards, Ken

[jibes]

Whether you know it or not, you made a good contribution with some of the ideas you introduced.

Jack

Jack

These are sweet words to me. I hope I didn't lead anyone astray. I have a new system now and it looks like a winner.

Neal

[lifo]

Whether you know it or not, you made a good contribution with some of the ideas you introduced.

Jack

[jibes]

Sorry for abandoning this site but it was mainly because of a lack of interest in AIM RE-Bal as well as it's complexity.

Jibes

[lostcowboy]

Hi Aimster, its been awhile, but you should still find that info over here. http://www.investorshub.com/boards/board.asp?board_id=966 I have the messages in the header of the board.

In a nutshell, keep track of your average cost (AC), when the stock price (SP)is above AC, buy less, and put the money away. When the SP is below the AC buy more stock than you normaly would. The basic formula is AC/SP = the multiplier. The multiplier is used with your normal investment to ether increace or decreace the size of the investment.
Example, you invest $100 each month, your AC is $10, and the SP is $10 you would invest the $100, But let's say the SP was at $12 You would only invest 83% or $83. If the SP had been $8 you would have had to invest 125% or $125.
That was Mr. Lichello's original idea, but then he got to thinking, Where is this extra money going to come from? So he came up with invest 75% in stocks, and 25% into some type of interest paying account, Bank, or bond fund, or money fund. Thats where the extra money comes from.
Note, Mr Lichello was doing DCA into a retirment fund through out the 60's, and saw a large loss in the early 70's.
One of the things he saw was if he had sold he would have had no loss at all, so he decided to sell all the stock when he had a profit of 100% above Average cost. At that point, the next month the AC will jump up to the current SP.

He then got to thinking, I now have this huge stack of cash, if the stock market crashes, how can I get the cash back into the market at the bottom, or close to it. What he came up with was to use his multiplier again, if the multiplier is greater than one, then subtract one from it, and use the fraction times your cash reserve, to come up with a huge investment amount near the market bottom.

Example, you have a normal investment of $100, you would use 75% ($75) times your multiplier, plus any fraction of the multipier greater than one, times your cash reserves. Say your cash reserve was $5000, and the market had droped 30% below your AC of $10 to $7. Here is what the formula would do.
$75 times (10/7= 1.43), you get $107.14 for the first half of the formula, and (1.43-1=.43) times $5000 = $2150.0 for the second half of the formula. Total amount to invest is $2257.14 and that leaves you with cash of $2842.86 for future investments.

Hope that helps.
Lostcowboy

[AIMster]

Synchrovest

Just curious - has anyone posted a message that explains the synchrovest formula and its implementation?

Thanks!

AIMster

[2mc]

Jibes,

What has happened to your website? Is it up and running elsewhere?

Matt

[AIMster]

Is/has anyone ever used VectorVest?

I tried it for a while a couple of years ago. Basically I found it to be a good way to make yourself incredibly rich backtesting old data - you can create a nearly unlimited combination of parameters to screen through their database and it's easy to 'cherry pick' a formula or two which performs fantastically creating what-if scenarios. Unfortunately my time machine isn't working so I can go back into the past and take advantage. Drat. <grin>.

Bottom line is there's a couple of quotes that go along the lines of "if someone really found a way to beat the market would they make it available or keep it to themselves?" and "people who sell systems don't actually use the system, but make their money selling the subscriptions and belief that the system will in fact let people beat the market."

I'm not saying VectorVest doesn't work. Perhaps it does. But I think it cheaper to select stocks or ETF's on my own and supplement them with AIM than to be locked into a proprietary subscription model of stock selection where I have to pony up several hundred dollars a year for a service that may be little better than what I can get on my own from the Yahoo screener for free.

Caveat Emptor

Best,

AIMster

[AIMster]

What if we could find the top 10 stocks that have a high correlation.
1. Invest in them for one month.
2. Then again, find the top 10 stocks that have a Hi-C. Some socks will remain, some will be replaced.
3. Rebalance the portfolio and repeat steps 1 & 2...etc, etc.


Not exactly using high correlation, but VectorVest suggests a similar strategy of buying the 10 stocks with the highest VV rating, then replacing those next month that have fallen out of the list from the prior month. I suppose you could do the same with Value Line or any similar service that allows ranking of some sort or another. Would need to test how such a thing would work in the 'real world - in other words as something falls out of the top 1o are you still making a profit on it or are you losing money?

Best,

AIMster

[AIMster]

Hi, Jibes,

I've been pondering your "free shares" idea..

You wrote:

Lets say you buy:
20% below LKP of $6.25 = $5.00 : $300 at $5.00 = 60 shares
30% below LKP of $6.25 = $4.37 : $500 at $4.37 = 114 shares
40% below LKP of $6.25 = $3.75 : $700 at $4.37 = 187 shares


Shouldn't the price on the 40% line be $700 @ $3.75 rather than repeating the $4.37 from the line above?

Also, in keeping with the "no free lunch" idea, unless your shares are in a tax sheltered account, you don't really end up with any free shares, per se, as they all have a cost basis. And this method works best ideally if you sell the shares on a FIFO basis (selling the most expensive ones first, keeping as "free" the later shares purchased at a lower cost). So whilst you've redeemed your initial investment (and in that sense the shares are "free") if you later sell the remaining "free" shares Uncle Sam will still want his due, though their cost basis may be small indeed. Unless I'm missing something ( or having a "well, duh" kind of moment! ) <grin>. If they are indeed truly free, selling those later shares gives you just 100% profit then, eh?

Interesting idea, though, and thanks for any clarification.

Best,

AIMster

[Themistocles I]

[jibes]

Everyone.

I have not done anything with my board for a while. Sorry.
I have been busy playing music and doing other things as well as testing my different approaches to the market and have come to the conclusion that good old AIM is the best overall. I still do like Free Shares, DDCA and PPXO just fine but in the long run AIM is probably the best.
BTW, I can not trade using charts or any timing methods like that. I have found out the hard way through trial and error that I do not have the temperament for it. That is why AIM or DDCA are the best for me. Right now I am using DDCA and employing a technique to determine how much to buy and sell based on volatility. It's all quite new but I have been testing it far the last 2 Months.

This is how it's done:
For a 6 Mo. period I find the high and low price (Using a chart). This then is the Range.
I then divide the range by 6 to get a 6th part of it.
I then find the mean of the range (by adding the high and low and divide that by 2).
Next I divide the 1/6th part by the mean price.
This then gives me a number that is a percentage. I use this percentage for the trading range for DDCA PPTM. Simple!
In other words if the percentage is 7% (+/-7%) I use this as my min up or down move to buy or sell. It does work quite well because the swings are well suited to the price range for the 6 Mo. period. The 6 Mo. period is updated when ever a traansaction takes place.
Now, here is the deal; I would think that if I were to take that % and apply it to the "SAFE" in AIM instead of a fixed 10% as in the standard form of AIM it might just work.
If the %. were 7 then my safe would be 7% of the stock value or if it were 17% then of course a much larger safe would logically be called for. A blue chip might be only 3% and then a relative small safe. Remember that the normal SAFE is 10%
If anybody would like to test this feel free. I do not have much time to do so. It does stand to reason that a smaller safe for a stodgy Blue Chip compared to a more volatile issue like SIRI would make sense.

Just some food for thought.

Jibes
TrendSeekers at:
http://homepage.mac.com/bondiblueone/trendseeker/index.html
Please, come hear my music:
http://www.icompositions.com/auditorium/showphoto.php?photo=2973&password=&sort=1&cat=al....

[OldAIMGuy]

Hi Jibes, I've not had any time to try any testing, but a thought occurred to me relative to rebalancing of a variety of AIM accounts. Since AIM's already doing some internal rebalancing with it's own activity, maybe it would make sense to just rebalance the Cash Reserves once a year.

By redistributing the cash we'd be taking cash profits from one investment and funding a weaker one when its reserves were low.

Much would depend upon the class of investments one was using. For instance, Exchange Traded Funds might offer a very nice opportunity for such a program. Since the "single stock risk" is much diminished with sector funds, one could possibly let the "tech" sector continue buying with cash redistributed from, say "energy" sector.

I have a feeling this would make for rather spectacular results coming out of a deep bear market. Those funds that didn't completely exhause their reserves would still have smaller "anchors" to drag along. Those who used rebalanced cash would certainly have made buys at a much deeper discount than it would have otherwise been able.

Just a thought....

TV

[jibes]

Conrad.

Bummer!

$1500 down the tubes. One consolation, only commish on the way going in! #:)

Jibes

[Conrad]

Hi Jibes,

If that $ 1190 is the only thing you lost then it's not too bad. I had a few like that, over the years. Notably BRE-EX Minerals from Canada. Bought 50000 shares at the Can $ 0,03!

:-/

[jibes]

Conrad.

Not too high. Except I bought it just before they announced BK!
if I remember right, I bought it at 1.19. $1190 down the drain.

jibes

[Conrad]

XOXO ???

Thanks Jibes. I hate wall paper. I used carpet on the walls when I had my own. Great sound absorber and its looks very cozy too!

From what height did these XOXO shares dive?

[jibes]

At Free Shares I noticed that the increments of investment amounts should have been $200 instead of $100 as I originally stated. So I have made the changes to the site. $200 is more in line with what I based the model on. It's not a hard fast rule however but rather something to go by

I now have an example using XMSR with more to come.

Jibes
TrendSeekers at:
http://homepage.mac.com/bondiblueone/trendseeker/index.html

[jibes]

Conrad

I do have 1000 shares of XOXO you could have. They would make great wallpaper! #:)


Jibes
TrendSeekers at:
http://homepage.mac.com/bondiblueone/trendseeker/index.html

[jibes]

Cliffod

I have checked out Synchrovest and I see many similarities between it and Free Shares. One glaring difference is buying above average cost in SV and also selling all shares. But, it is after all a variation of DCA so it holds true to form. Maybe one could set a limit if the price were to exceed Ave Cost by X% then no buying would take place. Buying when the stock price goes way up seems to be ineffective. Of course the multiplier does limit buys very well.
I really like Syncrovest and Mr L, as you said, didn't know the full potential of what he had.
I wonder if one could marry the best of Syncrovest and Free Shares and come up with a really great thing!

I can see where your SS could be used and I will look into it.

Jibes
TrendSeekers at:
http://homepage.mac.com/bondiblueone/trendseeker/index.html

[Conrad]

Year End Vortex Demo Portfolio Result now available:


http://www.investorshub.com/boards/read_msg.asp?message_id=2038428

[Conrad]

Hi Jibes,

I have not been keeping track lately on what you have been up to, but yesterday I checked out your website again. I am amazed at the amount of work you have been doing! When I first read about your idea of Free Shares I intended to place an order for a million of them, but at the time I had other things on my head, so I thought that I could place the order the next day. But you know how it goes: From one thing comes another, and after a while I figured all the free shares would be gone anyway, by now, no point sending a request right now.



I have perused some of your proposed trading systems and related them to Vortex. I have placed my comments on the Vortex AIMing Board as you might not appreciate as long reply on your Board.

See:

http://www.investorshub.com/boards/read_msg.asp?message_id=2018337

Regards,

[lostcowboy]

Jibes, we have to stop butting heads like this. lol, I have been thinking on the Last Known Peak idea for a while! I see that you do not have a spreadsheet yet. If you like you can try my new Synchrovest spreadsheet to test your Idea, it should work. In the new Synchrovest spreadsheet, change the 200 day MA column to Last Known Peak and just stick your numbers in each month. If you adjust the trigger point for the second stage to a low fraction, like .1 or .05. then it will never kick in and you can see how well your idea works. While the new Synchrovest does not divide the cash by a number and give out equal amounts over that number of months. It does have a planned investment divider, that works similar. So you can get a good idea of how your system will work.

I hope you are having a merry Christmas and holidays.
Clifford

[jibes]

I have moved my website to:

http://homepage.mac.com/bondiblueone/trendseeker/index.html

And now I am introducing Free Shares! Yes! I have been very busy and all during the late summer and fall I have been thinking about the concept of Free Shares. It seemed to me that at least the concept was sound but how would it do against other methods. Very good is my conclusions! So good in fact I have converted my whole portfolio to Free Shares!
A very simple yet effective method to play the market. Though the page showing the concept and mechanics of Free Shares is fairly short at this time I will be adding more info as the days and weeks go by.

All completely free.

I am very excited about this!

Jibes

[karw]

Further...

You can use the efficient portfolio theory to calculate the efficient ratios of the different risky assets.

Using Tobins separation property, AIM or an AIMlike vehicle, can manage the ratio between the riskfree asset and the risky asset.

AIM could manage on a monthly basis, or any other wished frequency.

Rebal can take place quarterly/biyearly, where EPT and AIM can calculate the Rebal matrix.

Kind Regards,K

[karw]

Hi 2MC,

Thanks. I can think of rebalancing two assets. When you think of 3 or more, it becomes confusing. With two assets you have 1 rebalancing parameter. With N assets you have N*N parameters, it is a matrix. At least that´s how I look at it now. Success.

Your friend,
Karel

[2mc]

Hi K,

Yes, I'm currently considering a rebalancing method that is automatic and works similarly to AIM (any flavor). When I'm through testing, I'll report. Don't know when I'll get to it, but I'll let you know.

Your friend,
Matt

[lostcowboy]

Hi Jibes you need to read #msg-1326702

[aaCharley]

Jibes,

I've looked over the DDCA Spreadsheet and would like to contact you off the Aim Re-bal Message Board. At you web site you show an e-mail address of [e-mail]. That does not seem to work. But it could be my set up. In any event, Is that still a good address?

Regards

Charley

[jibes]

I heard that when the war was deemed a victory people went back to worrying about the economy and that had been driving the market down. B.S.! The market is going to go where it's going to go and they will always find a story to go with it. Except for very obvious events, e.g. Sept. 11th the market has a mind of it's own. Only the very, very long term picture can shape the market direction and we hope to be on the right side of the market no matter what!


Jibes
TrendSeekers at:
http://jibes0.tripod.com/trendseeker.html

[jibes]

As I see it, the market is quite bullish at this point. I'm not going to say run out and mortgage the house or anything like that, but clearly a change for the better has finally come. In the weeks ahead or even days the market will pull back. Then it will test the mettle of it's strength.


Jibes
TrendSeekers at:
http://jibes0.tripod.com/trendseeker.html

[jibes]

Wow! Yet another trading method based on DDCA called PPTM.

Check it out!

Jibes
http://jibes0.tripod.com/trendseeker.html

[jibes]

To all again.

I have posted the new DDCA SRB to my web site. It's in a rough state but usable I believe. What I failed to elucidate clearly is that the data derived from SRB is plugged into DDCA or AIM.
Let me know if you dont understand what I was trying to say in this web page, your feedback is important to me.

Jibes

[jibes]

To all.

I said I would have DDCA SRB on my web site soon. This did not happen and I'm sorry for getting your hopes up. I am working on it but it's a bigger project than I thought.

Jibes

[jibes]

Aaron.

I am working on the web pages that will describe DDCA SRB and should have them up this week.

Yes, with P&F charts it does lag if the 3 x's or o's are met. I have never used them though.

SRB uses the Slow Stochastic, RSI and Bollinger Bands as the three signal generators. Of the indicators I have studied I like the RSI as the best overall indicator. The Slow Stochastic as well as the PPO or MACD.

You can do the PPO XOver another way:
At stockcharts.com you can set two moving averages. Set one (the top one) to exponential 20 and the other to simple 30. You end up with two Moving averages of nearly the same data except the expo ma is more sensitive to price movements. When the blue line crosses the red line buy and when the blue crosses the red down sell. It's very close to PPO XOver and as a matter of fact I discovered PPO XOver because I thought I could do it that way with PPO and it worked. They do not always give exactly the same signals but are very similar.

Jibes

[aaronman]

Hi Jibes thanks for the welcome. I will keep an eye out for DDCA SRB. I hope it will be available soon.

I have been thinking about the idea of PPO XOver and using it to switch between the long and short Rydex double beta QQQ funds like www.fundswitch.com does. I have been looking at Point and Figure charts and buying the long fund on the X columns and the short fund on the O column but this method seems to lag a little on the entry and exit points.

Since you seem to know a lot about the different charting indicators I was wondering what you thoughts might be the best indicators to watch.

Thanks
Aaron

[jibes]

Welcome Aaron

In theory the rydex rebal is a good idea. The problem I have found is that PPO Xover did not yield very good signals. Maybe the sensitivity could be changed by changing it from 15-16 to something like 10-11 or some other number. PPO Xover really works best on high beta stocks.

If you want to sell incrementally using RSI and or Bollinger Band tags would be a great way to go and this is what DDCA SRB will do.

If you check out my DDCA and soon to be posted DDCA SRB, I think that would be the way to go. DDCA is almost equiv to AIM but without the problems of AIM like running out of money and then getting locked out. DDCA can run out of money (and shares) at times but not to the extent AIM does. DDCA is far superior to AIM in my opinion. Right now I think a 4% to 7% min at 90% of the percentage change per week seems to work best. I will be updating the SpreadSheet very soon.

Otherwise PPO Xover would be a great way to go too.

Jibes

[aaronman]

Hi Jibes I was looking at your PPO Xover idea and it looks real good. The one thing I always hated about AIM is that while a stock is going down your buying more and more of it hoping that it would come back.

I am not sure of the best way of going about this but what if you opened a Rydex account used AIM to manage the portfolio and used the PPO Xover to rebalance your funds between the Long and Inverse funds.

This way AIM would allow you to sell incrementally as the stock went up to lock in some profits. My problem with it is since hopefully you wouldn't see too much of a downside your investments you wouldn't be doing too much buying. Maybe some other method besides AIM would be better to incrementally sell on the upside to lock in profits.

Please let me know if this is a good idea and how to maybe refine it.

Thanks
Aaron

[jibes]

LC

Yes DDCA (Dynamic Dollar Cost Aveaging) is now the name. Even though it's like AIM it's still not AIM so out goes the name "New AIM".
I checked your SS against mine and I found a mistake with mine. It was a very small mistake but I fixed it and now our sheets agree. It's amazing how similar our updates were. even to the same column.

I am so happy with the results I'm getting. I now think every other week would be a good update period for auto DDCA.

DDCA SRB is in the works now and will replace SR, SR worked but the new way is more straight forward. It shall be great!

Jibes.

[lostcowboy]

Jibes, sent excel file to your yahoo address. Let me know what you think.

[jibes]

lostcowboy.

I agree and I was plagued by that prospect also. But looking back on some of the tests I ran it didn't seem to be a problem at all. (I used higher beta stocks though.)
In reality it should be done as you stated and with a lower beta stocks most definetly.

If used for real it would not be a problem. If you have a price that does not trip a buy or sell then ignore that entry and wait untill the next period or price qualification.
If you are just testing however, it does become more dificult to enter data by pasting historical data it as we are used to doing.

Thanks for the feedback.

Jibes

[lostcowboy]

Hi Jibes, on first glance your new aim spreadsheet looks good, I had to go back and reread the web page though.
one sugestion, the web page reads Basically then: Each week or month or set period of time you will find the percentage the stock price either went up or down from the previous period stock price. I think it should read Basically then: Each week or month or set period of time you will find the percentage the stock price either went up or down from the previous (stock price of the last buy or sell). I know it sounds like I am nit picking, but I think it will work better. Now how do we get the spreadsheet to understand that? What I am thinking of is a stock that drifts down so slowly that it nevers hits the 4% limint, or finaly hits it, but the change from the last buy/sell could be more than 4%. what do you think?

[jibes]

greyhound

I'm glad you liked it. When I ffirst discovered the concept I was very happy with the results and still am.
At first i didn't know what you meant by $12 but I assume you mean brokerage costs. Yes, AIM RE-bal is more costly in that regard. Perhapes a min buy amount would be good in order to eliminate a lot of small buys / sells.

Check out my new (just posted tonight) trading system called "SR". I think it has lots of promise. It's another AIM hybred.
Now that I think about it some aspects of SR may be used in AIM RE-bal to enhance it even more.

Thanks for your interest.

jibes

[greyhound]

Jibes, I spent this weekend going over your Excel spreadsheet and I must say I find it very interesting. I also added $12 per trade in the ReBal program and it still beat the straight AIM.

Just a few views from the sideline. A person might be able to obtain these results with a balance fund. Your method also bode wells with many 401-K plans, and it looks very good for cash accounts.

Your Excel sheet had a lot of stuff I would not included but others may, nice job.

I guess that is the cream of AIM, if you can have a good stock picking program AIM can enhance it.

[jibes]

I am very excited about the results obtained by back testing PPO-XOver. A simple yet very effective method to garner great profits. If you haven't yet, check it out at my website:

http://jibes0.tripod.com/trendseeker.html

Jibes

[jibes]

The links on top of the AIM ReBal site were not working.
I have fixed them and all is well again

Jibes

[jibes]

Tom I hit submit by mistake.

I was going to say I used to sbscribe to barrons in the early 80's but now with the advent of the internet I get all my info there.

Thanks for putting my link at your site. I did notice an increase in traffic and was wondering why, now I know. Your site is very popular and useful.

Jibes

[jibes]

Hi J, This week's BARRONS spends several pages discussing Asset Allocation and Portfolio Rebalancing. Page 23 starts the article. Reasonably well written, it might even have some "quote-ables" in it. I don't have access to BARRONS on line, I read it at the library.
Best regards, Tom

I don't have access either so I'll have to check it out. I used to subscribe to BARRONS

PS: did you see that I've added your Re-Bal site to my Other AIM Sites category? I'll go back and add a link to this thread as well.

[OldAIMGuy]

Hi J, This week's BARRONS spends several pages discussing Asset Allocation and Portfolio Rebalancing. Page 23 starts the article. Reasonably well written, it might even have some "quote-ables" in it. I don't have access to BARRONS on line, I read it at the library.

Best regards, Tom
PS: did you see that I've added your Re-Bal site to my Other AIM Sites category? I'll go back and add a link to this thread as well.

[jibes]

Don

Interesting site and good to see another method.

I didn't have time to check it out in detail but I will later.

Thanks,

Jibes