Created: 02/26/2002 06:07:10 PM -
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I'm reconstituting this AIM board to be stocks selected from Value Line's Selection and Opinion sections. It's available in most public libraries on a weekly basis.
These stocks seem to have staying power and offer reasonable returns. Further, I feel they can benefit over time from AIM management.
The PIC List faded out quite some time ago. It wasn't a bad idea, but no longer fit with my investing M.O. at that time.
In more recent times I've been using Value Line's Selection and Opinion section for a source of potential AIM stocks. There four portfolios updated weekly from which to choose stocks. They range from Momentum shorter term (12 Months) suggestions to longer term, mature, higher dividend type of stocks.
Portfolio I is "Stocks with Above-Average Year-Ahead Price Potential"
Portfolio II is "Stocks for Income and Potential Price Appreciation"
Portfolio III is "Stocks with Long Term Price Growth Potential"
Portfolio IV is "Stocks with Above Average Dividend Yields"
Each list is 20 stocks, so there are a total potential of 80 stocks from which to choose. Value Line does track their performance and gives updates when stocks leave or are added to the lists.
For AIM usage probably Portf I is the weakest, since the time horizon is too short for AIM to contribute meaningfully. I've been filling my "Sandbox" portfolio with stocks from Portfs II and III in recent times and they've been doing well enough that the lists are becoming comfortable hunting grounds for my AIM.
Two reasons I like these lists are that the companies are generally well known and trade reasonable volumes and turn-over is very low. Months will go by on II and III where no changes at all are made. That's good for AIM in that we can let it work its show while we collect the dough. Further, I've found that these more mature companies have reasonably good cyclical moves without need for high doses of MAALOX. Of the 47 stocks I've had on these two lists since I started following them well over a year ago, their average Low to High ratio is 1.40:1. That's enough to generate some AIM activity and only 6 of them have zero dividends. So, there is some rent to be collected while holding these stocks if you choose the right ones.
Another aspect of owning well known companies is they generally have active Options potential as well. Those of you who piggy back AIM with some selling of Calls or Puts should be able to find yet another way to collect some rent from your ownership.
Generally I have been using 10% of Portfolio Control as my minimum order value. That translates to selling 10% of shares and buying 12% more shares when trades occur. Further I've been using 10% SAFE on the Buy side with Zero on the Sell side. While this creates roughly a 30% Hold Zone, I'm still getting nice trades occasionally. Part of my reasoning is I've been selecting for my Sandbox stocks with reasonable dividends. My logic is I don't want to be selling shares that are paying nice yield when the cash is going to be earning squat.
I've been picking stocks on the conservative or value side from these lists. I have a watch list of them set with the 52 Week Low as the Alarm. I'm not as concerned about new highs. When I see an alarm for a new low, then it gives me some time to study the stock in question and my chances are better at buying it when it's near a cyclical low point.
You may choose to pick the higher BETA stocks from these lists and to not select for Dividends. This would probably spice up the AIM activity to a degree. I'll leave your selections to you. If you choose from these three longer term portfolios most likely they will stand the test of time and AIM will help build value along the way.