Is there a weed ETF?

Hi Under, I want to know where I can get a guaranteed 7% interest?

Hi Under, There are two reasons that AIM can underperform. The amount of cash can act as a drag especially now with the interest rate so low. I believe the amount of cash recommended by v wave is way too much to make AIM work. The 20% cash of Lichello's AIM Hi is probably the optimal amount to make AIM work in a broad based portfolio.

The other reason is if you AIM an individual stock that happens to go into a deep dive and does not recover and end up sinking a lot of cash and hurting the performance of the whole portfolio. The majority of the portfolio that one AIMs should be in broad index ETF's IMO.

This Bitcoin, is it more valuable than Monopoly money?

With the market staying high, oddly I had a buy in IYZ the Telecom ETF. It's not been a strong ETF but has not been a bad AIM candidate because it's oscillated up and down with a relatively small net increase.

Today had another sell in CGNX, which leaves me with only 56 shares left, enough for two more sells. It's an ld-aim program so it may sell out. If it does it's fine as I have too many programs and I'm interested in ETFs only for AIM.

Hi Mike, Sector ETFs are well suited for AIM and I believe Tom has AIMed a portfolio of sector ETFs. The only sector ETFs I own are IYE (energy) and IYZ (telecommunications)and KRE (bank) and the latter has not done much. These have very long wavelengths of several years and do drop by 50% or more, so you have to have a long time horizon and strong stomach.

I tend to follow portfolio advice that the core should be diversified over stocks, bonds, REITs , commodities and cash, and my stock ETFs are mainly style ETFs like SCHA SCHE SCHC and SCHX, since I have a Schwab account I get commission free trades and the're very low cost. After the core you can assign a small portion for something more volatile and interesting like a stock or two.

You do have to be very careful with AIM when you use it on individual stocks and other specialized investments that you don't sink money into a losing stock, as on the way down AIM behaves like dollar cost averaging on steroids and can lose a lot money.

I sold the last of my active mutual funds and replaced them with Schwab index ETFs. I had two large cap funds and one mid cap. The Schwab ETFs have no commission fees and very low expenses.

Those three active mutual funds date back from my naive days when I'd pick funds by their performance figures over the prior 5 years.

I've been aiming IYE for years. My GTC buy order has not executed yet.

Ryan, you definitely have psychic powers.

That's called hedging your bets. Either way they'll be right.

Hi Allen, I agree with you completely. In fact Tom's Idiotwave is about 0.6 * V Wave (diversified) , which goes along with the amount of cash Buffet is holding.
Adam

Hi Karw, note that even with the present spike in Buffet's cash holdings 0f 95 billion it is still only 24% of his market valuation of 400 billion. It's a far cry from the v wave of some 42% for diversified portfolio. The V wave numbers are clearly overly conservative for an optimized AIM portfolio .

Hi Allen, Years ago I got the idea to AIM leaps on non volatile stocks like MSFT. The idea was to take a stable stock which is not a great candidate for AIM and AIM it's leap option. I chose leaps so I would not have to worry about the call option expiring.

The system worked fine for a few stocks and I made some money until I hit a bad stock. I don't recall the exact stock it was but it was a large paper company. This stock dropped and my system failed badly. I think I lost all my previous gains, and after that I never tried it again.

All my Aim programs are sitting within the hold zone except QCOM which is showing a buy after it dropped due to a lawsuit that QCOM lost. I'm holding off the buy to avoid catching a falling knife. It's a problem with AIM and individual stocks.

Hi Allen,
I'm not telling you what to do as we all make our own decisions, but I would argue to opposite. In retirement or close to retirement one has to be doubly conservative for you have no time to recover from losses. When you're in your 20's you have lots of time to recover from an investing mistake. Also, looking at a chart and thinking if only I had bought the stock at this or that time... that's a fool's game. Unless you have some Buffet smarts or inside information there is no way to know a stock will make such a large move up.

Hi Allen, I think it's crazy to AIM stocks like FTR or EMMD. Don't forget that AIM is a relative to dollar cost averaging on steroids, and do you really want to double down on a falling stock like that ?

I'll stick to AIMing ETF's and a few stocks that are much more stable.

A bird in hand is worth two in the bush.

For CGNX fans, I had a sell today at 68.9 . Once I thought this was going to be another deep diver but it has bounced back nicely and has turned out to be a good AIM stock.

Hi Tom, That was a good sell in AAPL. I've had this stock since 2012 and had a sale on Jan 18 at 120.4 and my next sale is at 135.8

Hi Bob, let me make another argument for holding a "core position" besides the dividend argument. Let's say the "stock" in question is a nice diversified ETF such as SPX or one that I hold, SCHM. These more or less track the market, which we know in the long haul tends to increase at something like 6% per year or so. If you ladder or LD-AIM that you will sell out and end up in all cash, while the guy who holds a core position is sitting pretty and continues to AIM.

An LD-AIM or ladder works best for rolling stocks that go up and down. But if the stock goes into deep dive mode the system is in trouble.

Hi Bob, One reason to hold the "core position" that does not trade is for dividends. For example two of my stocks Qcom and Intc generate about 3% dividend compared to almost zero in cash.

Incidentally I just had a buy in Qcom and a sell in Intc.

Adam

On Twinvest, some time ago I looked at this and it's a souped up dollar cost averaging. In dollar cost averaging you buy a number of shares proportional to (1/share price); in Twinvest it's proportional to (1/share price)^2.

Hi Tom, At Schwab I see the All or None option but I don't recall the Do Not Reduce.

Hi Lou,

For less volatile ETFs I do use smaller SAFE values. A good way to set the hold zone is to go to stockcharts.com and use ZigZag analysis. Choose a percentage for your ZigZags to give you an adequate number of trades (points on the ZigZags) over the past few years. I find that for most ETFs a hold zone of about 20% percent works well.

Adam

Hi Lou, I'll also add my thoughts based on personal experience and reading. Vanguard is excellent with its low cost ETFs for AIM. And I believe your trading costs are nil, which also helps remove on thing to worry about.

Avoid AIMing individual stocks. As Tom has pointed out, the v wave is too conservative, and a more realistic percent cash is to take the diversified V wave, which is 42.53 and divide by 1.4, which gives 30%. That's what I would use for your cash amount now. I keep one common cash pool for each account for all my AIM programs, and AIM each ETF individually. The UBH portfolio concept is great and works well with AIM. You can just use the some of the ETFs you hold right now to start Aiming. Start with Aiming the ETFs in your tax deferred account to avoid paying capital gains on each sell.

Use GTC orders especially on the sell side. Best bet to start is keeping the cash in a MM fund. This can also double as your emergency fund so you don't need a separate fund for that. Avoid a lot of small AIM programs.

For the arithmetic I use a spreadsheet that Tom has somewhere, it's called AIM Bare Bones or something like that, to which I added 3 columns to tell me the hold zone, with the buy, sell, and hold zone %.

One other thing. I think most of us have learned to take the dividends as cash and let AIM direct the reinvesting.

Adam

About Long Term Capital Gains and Dividends Tax: According to Schwab Website the tax rate depends on the tax bracket but for most of us it's 15%.
http://www.schwab.com/public/schwab/nn/articles/Taxes-Whats-New

Can you comment on this. Are there state taxes as well on Long Term Capital Gains?

Had a sell today of QCOM in a taxable account. I try to delay these sells by increasing the limit price to account for capital gain taxes. I wonder how others deal with this problem with their AIM programs.

Hi Firebird, I also think XBKS should see a temporary boost from the reverse split. The price will jump from 2.5 to 25 and some, including some funds, do not buy stocks under $10.

Looking at a 10 year chart it traded over 300 ten years ago and is now around 2.5 or so, but has been stable last few years. It highlights the risks of AIMing individual stocks, for if you bought this 10 years ago you would have a major AIM disaster on your hands.

We must be having a strong bull market day as I've also had sells in KRE, SCHA, and PRF

Hi CGNX fans: my GTC sell order executed at 61.5 for 10% of my shares.

I Toof, I find there is tendency to end up with too many AIM programs if you're been doing this for a long time. It's one of the pitfalls.

Hi Tom and others, re tax loss selling, we should probably wait before buying the beaten down stocks/ETFs of 2016 until closer to the end of year.

Hi Allen, I would think with AIM and ETFs volatility is not a bad thing. SMMV is a reduced volatility index ETF.

Hi Toof, Congrat on you sell in KRE. I got the idea for this ETF from you, and my next sell is at 54.9.

Hi Allen, for KRE I set a 22% hold zone with Buy Safe 8%, 2% sell Safe, and a 10% trade.
So my previous sell was at 46.6 and today's sell was at 50.7 and each sell was about 10% of my shares.

I should say that I do make small changes to my Safe parameters so the AIM programs go through selling and buying. For example if I see that the program is buying more than selling I will increase the buy Safe and decrease the sell Safe.

From what I read, the bank stocks have had a boost from the election with the belief that Trump will reduce regulation and repeal the Dodd-Frank Reform Act as Bob mentioned earlier on this board.

Adam

Paging Toof. Did you get a sell in KRE? I got my second sell today.

Hi Toof, Do you have any idea why KRE rose so much on such high volume in the last two days? Anything to do with the election?

By the way thanks for the idea to AIM KRE. It's been a great AIM program with a good balance of stability and volatility and low expense ratio.

Sale today triggered on KRE at 46.6 for 10% of my shares. It's a regional banking ETF that rose on high volume today. Anyone know what that's about? I put my next sell at 50.7

Anyone make any trades based on the election result or the futures tanking overnight?