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Hi Ken,
Yes, it's been a tough year so far. The uptick at the start of 2022 followed by the long swoon tends to make for some challenging times for Tax Planning:
https://www.signalpointinvest.com/market-risk-report-as-of-december-19-2022/
Maybe after the first of the year we'll see some of the corks that were pushed deepest start to surface again. I've been watching Short Interest as well as End Of Day trades and volume. There is a lot of window dressing going on, it would seem.
Merry Christmas from Wisconsin,
OAG Tom
Price Update from 10 Months Ago,
I was sitting sweet on Feb 17th of this year, but that was then and this is now... Pocket Change Portfolio Price was $5.54 that day on the close... Been a slow steady walk down the stairs when yesterday closed at $2.14... About a 61% drop over time, so I guess I managed, adjusted, and wiggled with my cash fairly well as I fell down the stairs this year. Sitting at new lows, and the program is buying heavily, as it should... I did get in another large sale back in Feb before we tanked, but that's not noted in the Newport picture I linked this message to... This has been wild for sure and challenging too... Can't remember a year quite like this one ever... "Profit from your ideas!"
Added Cash, New 52 Week Low...
Ran out of cash last week on my last purchase, and didn't have enough to fufill the program buy. Yesterday I hit another new 52 week low and that buy signal grew much larger. So rather than just sit here, I added cash to the account and bought more... With the cash addition and subsequent purchase, I'm now at 88% Stock, 12% Cash... Simple Return -37.54%.... ROCAR is -47.79%... Crazy year! "Profit from your ideas!" Merry Christmas to everyone on the board!
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of December 23rd
_________________________
Short Term (18 Months)
Individual Stocks: 47% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 32% (Unchanged from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 45% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 30% (Unchanged from previous week)
Oscillator: 1.85 (Down .15 from previous week)
*See posts #44585 and #44588 for Tom's explanation
New 52 week low, Update...
Just set a new 52 week low! Simple return -36.36% and ROCAR is -48,58%... Had a rally after Monday to within striking distance of my next sell, but fell back the rest of this week... I'm 100% Stock, and 0% Cash, all in... Seeds are sewed... Program has done it's part and I'd like to see a Santa Claus rally the back half of this month... Technically speaking, I didn't have enough cash today to buy all I needed, but I threw everything I had left at it! "Profit from your ideas!"
Than you so much for your response, OAG!!!!
I was trying to get some information about the polyaxon syst since there's so little in the www.
Best regards,
Pedro
Thank you so much for your response, TF!!!!
Hi P, Re: AIM variants....................
Other than the "liquidate" signal it sounds like an AIM variant. There was a similar one back in the DOS days called MyStocks, I believe. It was ladder trading with a liquidate feature as well. There's nothing wrong with the concept, I'm sorry I don't know about Polyaxon.
Let's hope someone else can comment. Usually Lostcowboy has some interesting finds.
Best wishes,
OAG Tom
Never heard of it before. The concept sounds AIM like the exact formular may vary.
For instance with REITS I am buying $10,000 and if it gets to $8,000 I buy back to $10,000 or if it gets to $12,000 I sell $2,000. Sort of AIM like but it isn't.
Toofuzzy
Hi, AIMERS
This is a question (specially) for the AIM-vets: have you ever heard about "the polyaxon system" (refer to WorldWideWeb.alanpuritrading.+c+o+m/product-tag/nagy-soliman/)? According to the little information I could read in the www: "This system is designed to take advantage of the market volatility, and does not presuppose to determine market directions or trends.
It is pure mechanical. All buy, sell and liquidate signals are precisely defined. No emotional decisions at all."
The author of this system (Nagy Soliman) has used the polyaxon system with gold&silver futures contracts around 1984/5 (3/4 years after The Money Spinner).
This is more or less the definition of AIM, isn't it? Could it be another AIM variant system?
Any additional information should be great.
Wishing you a Merry Christmas filled with good times and all the best for the upcoming new year 2023!!!
Thank so much in advance.
Season's greetings Toofuzzy.
For me, each "full" sale finishes a position with no residual shares or old ACB to worry about. Neat and tidy. Easy to report. Reduces the chance of a complicated tax audit (in Canada).
All the best,
old_john
How does it simplify tax reporting ?
Toofuzzy
Update.............
Had a purchase back on 12/5 which brought me to 98% Stock and 2% Cash... That purchase set yet another 52 week
low to the "Pocket Change Portfolio" this year... Since then in the week that has followed, I've had a +7.45% bounce upwards, but no sales yet. I'm loaded up, per the program, so we'll see where I go from here... Might need to rename this"Couple of Coins in my Pocket Portfolio" soon, :) So currently at Friday's close Simple Return was -28.88%, and ROCAR is -37.01%... Merry Christmas to everyone on the board! Ken
Thanks JD,
This week the v-Wave is nearly dead center at its Median value. We could interpret this as there being upside potential about equal to downside risk. The "Proactive" part is one full Standard Deviation below the Median while the "Caution" territory is 1 SD above it.
The database includes two decades of more traditional FED and Treasury activity but since the New Millennium started monetary policy has been on a path that has led to our current inflation. It's going to take a while to unwind 22 years of the Money Pump running nearly nonstop. We, as investors, have benefitted from the rising tide of money. As monetary policy tightens to correct the situation our accumulated Cash Reserves created by AIM will perform two functions: 1) offer some yield for the idle portion of our AIM engines and 2) provide liquidity necessary for the re-accumulation of shares as prices decline.
Best wishes,
OAG Tom
AIM reset.
Going back several years (2018), galtinvestor (post 42620) mentioned that he "resets" AIM after each sale.
Does anyone else follow this practice?
For me, this does sound compelling if only to simplify my tax reporting.
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of December 16th
_________________________
Short Term (18 Months)
Individual Stocks: 47% (Down 3 from previous week)
Diversified Mutual Funds
or Portfolio: 32% (Down 1 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 45% (Up 2 from previous week)
Diversified Mutual Funds
or Portfolio: 30% (Up 1 from previous week)
Oscillator: 2.00 (Up 1.34 from previous week)
*See posts #44585 and #44588 for Tom's explanation
Re: YTD Performance of portfolios vs Indexes......
Nasdaq Composite S&P 500 Dow 30 S&P Equal Weight
-26.6% -14.6% -5.3% -8.2%
--------------------------------------------------------------------------------------------------------------------
How many did I beat?
All All None One
Old John
1) Perfection is the enemy of the good ( or something like that ).
2) On any one day the market has a 50% chance of either going up or going down, AIM starts with 50 % stock ( you can adjust it SLIGHTLY based on where we are in the market cycle but only when first starting an account )
3) You can NEVER have all or perfect information. If you wait till you do you will never invest.
4) The perfect investing method will only be perfect in the past and will stop working as soon as you start using it.
5) Don't read, watch, or listen to financial Porn. Short ANYTHING on the cover of Fortune magazine.
Not always
Toofuzzy
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of December 9th
_________________________
Short Term (18 Months)
Individual Stocks: 50% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 43% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 29% (Unchanged from previous week)
Oscillator: .76 (Down .06 from previous week)
*See posts #44585 and #44588 for Tom's explanation
Can there be some light starting to shine on my various portfolios?
My contributory IRA account:
A simple two component portfolio with a growth ETF and cash. I'm using a slightly modified
Twinvest for the monthly contributions here. So far, so good.
My 10 Stock Sandbox account:
Cash is now around 1/2 of what it was at the 2021 peak. Share inventory is at an all time high.
Note this account now has to pay out a required minimum distribution annually as it is an
IRA account. The graph reflects the distribution and is therefore slightly lower than it would
be otherwise.
My International "Style" ETF portfolio:
That's a nice uptick this month after over a year of slippery sliding on the International front.
Again, roughly half of the cash reserve has been used so far during this decline.
My US Sector ETF account:
There have been two months in a row of approximately 5% improvement in this account.
Again, about half of the peak reserve cash level has been spent during the decline to flesh
out the Equity holdings here. Recent activity has been some selling in the Energy ETF used
here.
The pictures could be prettier, but overall I don't think things are too bad. In general these
accounts are ahead of the major indexes for the last 11 months. The cash cushioned the
downside and provided the needed purchasing power to average down on the investments.
Best wishes,
OAG Tom
Good evening Ray. Thanks for taking the time to locate this reference post for me.
Looks like some excellent information.
Canada - yes, born and raised. Love visiting the U.S. Many relatives in Washington state.
Thanks TooFuzzy. Please excuse my stubbornness. I have this pet mule called "Holy Grail". We sometimes search for the perfect watering hole and forget to notice that the one right in front us will quench our thirst.
Hi old_john,
If I remember correctly, JW started with AIM by the book. He did adjust the safe amounts along the way depending on the cash burn.
In his new book using leaps, the buy and sells are incremental as you are using option contracts. I like the leap strategy, but you need a lot of money to get started.
If you are interested in incremental buys / sells, check out post # 42726.
His examples are using leveraged ETFs, but the increments can be scaled to anything.
In one of your posts you mentioned the tsx, are you from Canada?
Ray
Old John
It doesn't matter when you start, just when you have the cash. Broad based ETF's are safer than individual stocks.
Start with more cash near market highs and less near market lows.
You can also delay trades and only trade at 13/30 ma crossovers though I haven't done that.
Thank you Ray. I checked out the pre-defined scans at Stockcharts. Very useful.
As a side note, my deep diver made the 52-week low lists in New York and Toronto.
Hooray for me!!! Shoulda, woulda, coulda....waited....
Mr. Weber's approach sounds quite similar to what Steve (The Grabber) alluded to with the Williams % R tool. Curious to know what % of available cash Mr. Weber uses for his first buy? Or does he go all in???
And a point of clarification, if you can. Does Jeff advocate incremental AIM sales on the way up? And then, all out (with the remaining shares) at the 52-week high?
Thank you again for posting this contribution. It is very much appreciated.
Hi old_john. Re: when is a good time to start a position?
In Jeff Weber's writings, he recommends starting a program at the 52 week low. Its's nothing new, but a good place to start. He also recommends selling at the 52 week high.
Stockcharts.com has free pre defined scans that include stocks and funds at their 52 week lows.
Ray
Tom
You need to start marketing those AIM decoder rings !
Toofuzzy
Hi Adam. Just came across this educational idea at Trading View. The observer thinks that XLE may correct soon. Looking at this long term chart, AIM would have done quite well over the last 20 years to so. Really nice volatility. I'm watching this one with interest. Definitely too early to enter for me.
https://www.tradingview.com/chart/XLE/P5VEDoAW-XLE-Energy-sector-FAANG-of-2022/
Thanks JD, Re: Current v-Wave in living color...............
I shortened up the time line to eliminate 2019 data for better viewing. Covid is still quite pronounced and still shows in both the 3 Year and the 18 Month lines just how deeply and quickly the markets (and the v-Wave) dropped with the event. It also shows the markets returning to similar levels by the end of 2020.
2021 and its extended period of "Caution" during the continued rise of the indexes is well displayed here. As the markets consolidated and corrected we see the v-Wave market risk declining to more moderate levels. Current levels are near Median for both the shorter and longer v-Wave lines.
Best wishes,
OAG Tom
You're Welcome John!
Our fried turkey was fabulous, as usual. '
My SLV program has been successful as you noted, but a lot of that is likely due to those covid related sales.
My thinking going in was that SLV would not be as volatile as most other holdings, but I felt I needed to have a 'Hedge Holding' vs my other programs. So it has at least provided that.
I should probably have set the min/max setting closer to accomodate for that, but the actual history of the program shows numerous same side sequential transactions, both Buy and Sell.
Looking at the dates of those transactions, some of that can be attributed to poor sequential timing discipline on my part (Sorry Tom)
So this conversation has me thinking through the "Efficient Volatility Index" concept I mentioned at the original AIM gathering in 2000. In essence it would add another transaction trigger using W%R's. 20 & 80 % exit crossover points.
It's a nice thought experiment too!
And BTW: W%R is a great way to trigger the initial Buy for a new program.
Have been spending most of the last few weeks on Christmas decorations outside, and now inside. We always do the inside immediately after Thanksgiving. Tree goes up today!
Have a great day!
Hi John,
Starting AIM with a new investment needs some thought. Mr. L. thought any time was a good time if you started with enough cash. It has been my experience that 50%, 33% or 20% could be 'right' but wouldn't it be nice to know which one was right today?
The v-Wave helps with investments that are correlated with the general markets.
Your thinking about using a moving average has merit. In my years of AIMing I've found AIM almost always is buying when the price is below the 26 week moving average and most times is selling above the 26 week MA. And AIM doesn't even use such statistics in its calcs!
Best wishes,
OAG Tom
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of December 2nd
_________________________
Short Term (18 Months)
Individual Stocks: 50% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 43% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 29% (Unchanged from previous week)
Oscillator: .82 (Down .07 from previous week)
*See posts #44585 and #44588 for Tom's explanation
Good morning Tom. Thank you for this reminder about the Permanent Portfolio. I have always been a big fan of Clive's work. Another terrific contributor to this forum.
I actually now remember discovering a similar version several years ago. I had completely forgot about it !!! Primarily because it was a momentum strategy - based upon an entry when an asset's price rose above it's 200-day moving average (I think). It seemed to miss a lot of potential buys at low prices that AIM is good at capturing.
The question remains - when is a good time to start a position? There are no guarantees but I'm thinking of starting new AIM positions only when an asset's price falls below it's 200-day moving average - maybe by 1 or 2 standard deviations? Not sure, I definitely need to do some back testing ...
Hi John, Re: 3 piece portfolio (similar to a "Permanent Portfolio)....
There are actually 4 pieces in it with the 4th being Cash. It can have each ETF as a separate AIM engine with the cash moving between engines depending on markets.
My other idea was to have 30 percent in each ETF to start and 10 percent in cash. Then it would get rebalanced when weights shifted from the starting weights. This isn't AIM but could have much of the same benefits. A friend is doing this with VUG, VNQ, IAU plus cash. So far in about 2 years there have been two rebalances I think. Dividends are collected in the cash column for the rebalance activities. To date the additions to the ETFs have all been done from Cash and no sales have been made. It's not been "live" for very long so the overall success is yet to be seen. Dividends fattened the cash pot enough to fund the rebalance activity.
Thank Clive for lots of study of Permanent Portfolio ideas.
Happy Thanksgiving,
OAG Tom
Thank you Adam. Congratulations on the "energy" sale. Covered calls are a little above above my pay grade right now... I'm being overly cautious with my available cash right now. Have a great weekend.
Happy Thanksgiving to you Steve - and to all of our fellow AIMers who have shared their wisdom and knowledge at this forum over the years. May you all have a safe and wonderful holiday weekend.
Thank you for sharing your SLV history using AIM. I am absolutely thrilled to see that you have had such success. Very well deserved.
Hi John, The closest is my XLE energy etf which is one of the few that has done well and I recently had a sale though assigned covered call. I'm still really low on cash.
Good Morning John.
I've AIMed SLV since 2013.
9% Sell Min, 11% Buy Min. 0 Safe.
This ETF generated 32 Buys and 25 Sells over the 9+ years (~6 trades/year).
And notably, 7 of the Sells were consecutive from March through August, 2020; depleting my actual shares by 47% (obviously pandemic related).
Those 7 Sells were followed by 6 Buys and 4 Sells -- Seq. B-S-B-S-B-S-S-B-B-B
It is currently my largest holding having added 4x to my initial Buy of actual shares.
Program to Date:
Buy prices ranged from 11.60-24.50 with a share weighted average of 18.46
Sell prices ranged from 14.90-27.42 with a share weighted average of 19.62
Realized Gain of 35.4% (LIFO)
Unrealized Loss of -8.5% (at current price of 19.81 vs 21.65 of cost remaining)
Have a Happy Thanksgiving!
Good day, Clive
I hope you're doing well!!!
May I ask you if the files aren still available?
A googledrive notification appears to let me know that I need your permission to access the files. Is that correct?
Best regards,
Pedro
Hi Toofuzzy. I agree with your statement about chasing dividends.
That's what has gotten me into my current "deep diver" predicament.
Thanks for these great suggestions Toofuzzy.
Looking at the price charts, they all appear to have nice volatility for AIM.
Thanks for this info Tom. Very helpful indeed.
With respect to your 3 piece portfolio, do you just let AIM manage the allocations dynamically?
In general I do not like mortgage REITS but I am wondering if there is a right / predictable time to buy them ( NLY ) in either the interest rate cycle or economic cycle. Is rising rates better ? Is pre recession better ? ( Like now )
Never good to chase dividends but ...... !
Toofuzzy
WPM gold / silver streaming company
SCCO copper miner
ERX leveraged energy ETF
IBB biotech ETF, BIB leveraged
Stay away from inverse funds and in general 3x funds are too much of a good thing. When things go bad they really go bad.
Toofuzzy
Hi John, Re: Gold Surrogate ETF and AIM......................
I have a long history with IAU, a gold based ETF. I use it in a couple of different portfolios, my "ultimate buy and AIM", a three piece portf which includes a growth ETF, IAU and a REIT ETF and in a global portfolio of ETFs as a contra holding.
My AIM settings are 10% Buy SAFE, zero Sell SAFE, 10% Sell minimums and 12% Buy minimums (based upon Portfolio Control). It's worked okay for me over the years.
Best regards,
OAG Tom
Just wondering ... if anyone has ever AIMed any of the following:
-gold etf
-silver etf
-crude oil etf
-natural gas etf
-inverse stock etf
I'm thinking about adding a position to my small "Vegas" Portfolio.
The first four look somewhat interesting.
I don't think that I have the stomach for the inverse.
Any thoughts, comments, or experiences would be greatly appreciated.
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Assistants The Grabber Toofuzzy |
Here's a handy "Quick AIM Calculator" for finding the next AIM directed Buy and Sell prices for your portfolio holdings:
A.I.M. Users Bulletin Board (AIMUSERS): Thanks LC, Now they can use the "calculator" again! (advfn.com)
While the AIM book is no longer being reprinted, it is available from Amazon for their Kindle for $5.99.
http://www.amazon.com/How-Make-Stock-Market-Automatically-ebook/dp/B002VKJ1EI/ref=sr_1_1?s=books&ie=UTF8&qid=1395757939&sr=1-1&keywords=lichello
Mr. Lichello wrote the book on AIM in 1977. In the mid-'80s he put an infomercial on AIM on late night TV and attempted to sell his workbook and audio tapes.
(1) How To Make $1Million In The Stockmarket Infomercial - 1985 - YouTube
It's a reasonable review of the AIM method for those who are unfamiliar.
Run A Successful Equity Warehouse
Welcome to the AIM Users Bulletin Board. This is the thread to post your thoughts, questions and comments on the use of Robert Lichello's Automatic Investment Management for handling the risk of being involved in the Equities markets.
The AIM strategy gives the user LIFO gains of 20% minimum if the method is followed "by the book." It is ideally suited to those seeking long term investment growth while managing the risk of being invested.
Thoughts on being a successful Individual Investor
I wrote this book review a long time ago. It's a trader's interpretation of
Sun Tzu's "Art Of War." I related it to AIM as best I could.
------------------------------------------------------------------------
Mr. Lundell says, "Today's financial markets are the last bastion of unabashed conflict.....
To participate, you must be your own general, devising a strategy, gathering information, executing your plan, and adapting to the situation."
How can we use AIM and the v-Wave for strategic and tactical planning to carry out Mr. Lundell’s requirements to participate in the Equity Markets?
"Be your own general"
You are in charge. You are responsible. When you win, you benefit. When you lose, only you are to blame.
a) Broad trends persist. Discover them. They will survive boom and bust.
b) Don't contemplate engaging in war while beholden to another. They could become your ruler!
To me this means "Stay away from Margin Buying unless you are certain of victory."
c) Establish and maintain a "Baseline of Survival" for your command.
This is the "income" side of my overall portfolio.
d) Know that reality is governed by Darwinism; Long Term Survival belongs to the fittest.
"Devise a Strategy"
Our strategy is to sell inventory into market strength and to buy into market weakness. Robert Lichello's AIM algorithm provides us with a systematic approach to follow that employs this strategy.
a) Sell quality merchandise to all those willing to pay.
b) Buy quality merchandise when the price offers reasonable hope to resell at a profit.
c) Let the allocation of resources and inventory be governed by the course of the market and AIM's guidance.
"Gather Information"
Today there is no excuse for not being informed.
a) Differentiate between information VOLUME and QUALITY.
b) Differentiate between FACTS and OPINION.
c) Find good sources of judgement where you cannot act as judge.
d) Information is trusted only when provided by those proved trustworthy.
"Adapt to the Situation at Hand"
The v-Wave measures general U.S. Market Risk (and may be sensitive to world market risk) from low to average to high. This helps you gauge the situation by:
a) Gauging your initial cash reserve requirements on new investments
b) Gauging your on-going cash reserve requirements on established investments
c) Judging whether to establish a bias for accumulation or distribution
d) Possibly starting no new AIM accounts when the v-Wave is showing High Risk
e) Possibly ignoring all AIM Buy Signals during v-Wave High Risk events.
f) Following all AIM buy and sell signals during v-Wave Average Risk events
g) Possibly ignoring all AIM Sell signals during v-Wave Low Risk events
h) Re-assessing your "Baseline For Survival" at times when AIM has your account heavily in Cash
i) Always attempting to beat measured inflation by 5 basis points minimum after all taxes and living expenses are paid. If you do this consistently, in good and bad markets, you will be winning long term
j) Possibly using "vealies" when your positions are cash rich relative to the v-Wave. Limiting supply helps to keep Momentum player’s Demand high.
"Execute your Plan"
Set the plan in motion; know that it takes time for realization. Follow the plan without hesitation allowing the goals to be realized. The strategy is sound so execution is all that is required.
a) Buy when the plan says
b) Sell when the plan says
c) Be very patient when no buy or sell signals are being generated
Reading Mr. Lundell's interpretation of Sun Tzu's work will help you focus on your own plan. It will arm you with knowledge of what others not using AIM are doing in the market. Understanding Short Term Trader's strategy and tactics is like having a spy in the enemy's camp. AIM users can profit by knowing just how these people think and act. AIM acts as almost a mirror image of what goes on in a trader's mind.
-------------------------------------------------------------------------------------------------------------
The v-Wave........
Mr. Lichello used fixed cash starting levels; first it was 50/50 then 67/33 and in the last edition of his book 80/20 for the Equity/Cash ratio. This "one size fits all" approach is like a broken watch that shows the correct time twice a day but is wrong the rest of the time!
Minstrlman, a regular contributor here, helped gather data from Value Line and formed a highly capable risk-cash indicator for our use. Since then, J Derb continued his work each week. As an adjunct to the AIM methodology we now have a Cash Indicator which helps guide our starting and ongoing Cash Reserve level of AIM relative to measured market risk. It can be used as a general market barometer or specifically with the AIM method. The v-Wave (or VW) is derived from the Value Line "Appreciation Potential - Next 3-5 Years" (VLAP) indicator shown weekly in their Summary and Index Section for their 1700 stock edition. Looking back through V/L's history we find the peak Appreciation Potential occurred 12/23/1974 at +234%. Our continuous database starts January of 1982 and we scaled our "zero cash" to the market risk low point of early that year. We take the VLAP and manipulate it to get an indication of how much cash should be reserved for diversified mutual fund AIM accounts. It should be multiplied by your stock or portfolio's BETA to get the cash reserve level of less diversified or more aggressive holdings.
v-Wave Weekly Cash Reserve Indicator For AIM Users
Current years of the v-Wave:
For diversified portfolios the Median value for the v-Wave is 29.5%. High Risk is 34% cash or higher for individual company stocks. Low Risk is 24% cash or lower.
To get a more proper cash level for individual company stocks multiply the current "Diversified" value by 1.5. This gives us 51% as the high risk threshold and 36% for the low risk boundary.
Looking at the cumulative risk of the v-Wave gives another perspective:
Cumulative v-Wave is calculated by taking each week's v-Wave Stock value, subtracting the median value from it and adding it to the previous total.
Significant historical events are shown nicely here and the v-Wave's response at those times.
v-Wave Calculations can be found at #30219. The data are a work-in-progress for now.
TooFuzzy provided us with a handy "Quick AIM Calculator" Here's a link to that page:
A.I.M. Users Bulletin Board (AIMUSERS): Thanks LC, Now they can use the "calculator" again! (advfn.com)
(follow the link on the above page)
AIM has a predictable pattern of "cash burn" in a declining market. Depending upon the SAFE settings AIM will generate new buy orders sequentially as share prices decline. It can be helpful to know in advance about how deeply AIM is going to draw down one's cash reserves. This link is to the "Cash Burn" AIM page. It shows various end points based upon the starting cash reserve level. Here's a link to that page:
"" rel="nofollow noopener noreferrer ugc" target="_blank">http://www.aim-users.com/cashburn.htm"; rel="nofollow noopener noreferrer ugc">A.I.M. Cash Burn Rate (archive.org)
Best wishes,
Old AIM Guy
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