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For anyone who is interested- I tried to copy parts of the prostectus which makes it clearer to me but the margins of the tables are a mess.
Basically it compares an index to the 3x fund. $100 in an index can go up 5% to 105, then down 4.76% to equal $100.
$100 in the 3x fund will go up to $115, then down 14.28% to equal $98.57.
The greater the volitility the greater the loss because volitility magnifies the loss. I am afraid this process will counteract the benefits of AIMing. I am truly sorry about this because I have welcomed the volitility not knowing it was working against me.
I still think these funds can be useful for short periods of time in a strongly trending market. I did well but the market has been going steadily up. And my sector funds have been chugging along quite nicely too. Cindy
Toofuzzy, I will track several pairs and will report. I LD-AIMed the ones I bought and am rapidly selling out of them. After the comments on the board and the prospectus I'm convinced. Thanks to all. Cindy
Thanks for your reply. The prospectus spells it out. The greater the volitility the greater the loss. Any advantage of AIM would probably be wiped out by the 50/100% process you describe. And, yes, it has been a wonderfully rewarding few months. Cindy
AIMing 3x funds
Some of you have shared that you are AIMing 3x funds. I jumped in in a small way and have been enjoying the multiple sells and a few buys. I wonder what your experiences have been and what your thoughts are about buying on the way down when we do have a correction. Most of these funds lost @80% last year. Are you worried about them not following their indexes? Or are you just looking at them as individual investment tools that have the volitility that AIM loves? I am afraid of individual stocks in that they can go to zero. Do you see any conditions under which 3x funds could be worthless? Cindy
I have 60% cash and must decide whether to keep selling or use Vealies or start another AIM machine. Also have been reading about the Permanent Portfolio and like how it could fit with AIM. Thanks for your comments on the PP. I really hate having so much money in money market if this is a continuing bull market. But who knows. I appreciate any comments you have. Cindy
Technical question. If you buy and sell a stock, you can buy but not sell it again until the first trade clears. But if you have cash in your account to cover the second trade, then it's legal, is that right?
Also, with paytrading you are compounding number of shares instead of cash. Don't know whether I'd do it without having the long/short to manage risk (somewhat), but it would be nice to see number of shares growng. Cindy
AIMSTER, How do you expect time to affect the relationship of bull to bear funds? At the beginning you have a perfect hedge ( with the understanding that the funds won't work perfectly). If the bull funds grow faster with the positive trend of the market, you have more risk on that side. However, if you are out of the market the rest of the day after your order is filled, that diminshes your risk on the bull side and increases risk on the bear side which has more exposure time wise. Of course, it's vice versa in a falling market. Appreciate your thoughts. Cindy
I keep hearing the same message expressed clearly by Toofuzzy:
The typical settings were designed for average conditions and are altered at your peril!
I seem to want to make AIM more exciting by increasing
trading or improving profits or whatever- I think I need to start thinking like the tortoise and not the hare.
Thanks for all the feedback. Cindy
Hi, All, I have been working on the LD-AIM spreadsheet, playing around with zigzag on Stockcharts and rereading Lichello. Now have more questions.
Many of the sector ETF's may do better with 15% spread to capture more volatility. Question of how to get that. My understanding is that Min. purchase is a band around Port Control that the stock price passes through before Buy/Sell Safe is used to determine market order. What would be the problem of making Min.Purchase zero and having Sell Safe at 7% and Buy Safe at 8%- other than increasing number of sales and commission fees? Steve, I believe you said you were doing this on incividual stocks. Is there a downside?
With some of the money from using LD-AIM I am going to try two stocks. So back to the library to do some research.
Thanks to all for your support. Cindy
Thanks, Steve, I'll start working on your spreadsheet. I take it that you have been pleased with your results since you are still using LD-AIM. Other than possibly running out of shares/cash is there any downside? Also, I'll be using sector and international ETF's. Do you recommend changing settings to 5%Sell/5%Buy and 10%Minimum with sector funds which will not be as volatile as individual stocks? Maybe working on the spreadsheet will answer that question. Thank you very much for your help.
Also thanks to all the others who have answered my questions. Cindy
So, Steve, as I understand it: I have set up eight AIM accounts but still want to have more accounts in other areas. To set up LD-AIM I can sell half the shares in each account and continue to track and trade the account with AI as if the shares are still there. This will mean I'll use a greater percentage of the actual amount invested in the buys and sells and must avoid running out of cash/shares. However, with LD-AIM I decrease the amount of money at risk and increase the percentage of gain. The settings will continue the same as in the original account.
Is this right? I like to understand things on a very simple basis before I invest. Cindy
Where is the best place to read about LD-AIM? Thanks. Cindy
Thanks to all of you who replied with cash reserve suggestions. When I came onboard there was talk about using zigzag to set the hold zone. After looking at the sector funds pretty carefully I thought 20 to 25% would be good and set my AIM settings accordingly. When I raise more cash I am planning to set Buy 10%, Sell 5% and Min 5% so that I'l keep my hold at 25%. I have very cheap brokerage fees ($1 per trade) and all in IRA's and Roth's. For the long term does this sound like a good plan when I'm using sector funds or should I go with traditional AIM 10/10/5%?
I am beginning to get the feel of how AIM works. This is the best thing I could have ever imagined. I love to get the chance to sell and can't wait to be able to buy again. So no matter what happens in the market I get pleasure. Just wish I had found AIM and this board years ago. Cindy
Would you mind sharing your safe settings?
I started with low cash 20% so have kept my buy at 10% and sell at 0%. I have been selling for some time now on almost all my holdings. I thought I would collect some more cash then raise my sell safe to 5 or 10%. Am I thinking right?
I am still learning but so far am feeling good about AIMing. Thanks to all for sharing. I rush to the AIM board every evening to see what other ideas are there. Cindy
"Follow the SignalPoint 'People' link and check out who the Chief Investment Officer is, I think you will find that the name will be familiar."
Ah, yes. No wonder Signalpoint is doing so well! Cindy
Clive, I am very glad you share your ideas and have found them most helpful. I particularly like the Signalpoint link and especially the Global portfolio with 13 sectors and 4 international etf's. Their description sounds like AIM. The Signal 10 Port (10 sectors) has pretty incredible returns, enough to make me wonder if they are for real. From 6/15/00 through 2008 return of 67.43% vs. S&P -38.59%. Who is running Signalpoint- AIM people? Thanks, Cindy
Clive, I am very glad you share your ideas and have found them most helpful. I particularly like the Signalpoint link and especially the Global portfolio with 13 sectors and 4 international etf's. Their description sounds like AIM. The Signal 10 Port (10 sectors) has pretty incredible returns, enough to make me wonder if they are for real. From 6/15/00 through 2008 total return of 67.43% vs. S&P -38.59%. Who is running Signalpoint- AIM people? Thanks, Cindy
AIM returns.
"Lets say you invested in something a year ago. If you didn't use AIM you invested 100% of your money and have lost 50%. If you used AIM you invested 50% of your money and lost 25%. You are already ahead. In addition you had that 50% to buy more at lower prices so you break even at a much lower price increase. Also the same amount of money buys shares at much lower prices."
Sweet and simple! Thanks, Toofuzzy. Cindy
AIM returns. Sweet and simple! Thanks, Toofuzzy.
Hi All, I too would really like to hear from you all about what realistic expectations we can have from AIM. Tom, I have reread several times your earlier posts that talked about how you came to AIM and why you stayed. Also I have read that it takes awhile for AIM to start "paying off".
When I was following trends and relative strength, I would capture the middle of a run but missed the beginning and top x percent. (And, of course, was constantly second guessing myself and biting my nails) With AIM it seems we capture the first 30% with 10/10/5% but also have a lot of cash at the top and large investments in out of favor funds/sectors. But as a beginner I am confused about how it works overall even though I have read parts of Lichello's book several times.
I am getting the picture that with AIM you don't necessarily hit home runs but you win the ball game. Cindy
Hi Karw, I haven't done the comparisons you have and don't have a lot of feedback for you. I use mostly ishares and have used the global sector funds a lot. At one point there was some concern (perhaps a rumor) about ETF's oversaturating the market and some closing. Also there is the liquidity problem. So I used ishares which are very popular. I haven't heard any more about ETF's closing. I really like Wisdom Tree with their dividend approach and will certainly use those funds when they are more popular.
I have several funds, many underwater, that I plan to close in the future and shift the funds into other sectors. I now own several commodity funds- gold, oil, steel, and commodities. I am finding it easier emotionally to make changes gradually. I appreciate hearing from people who have used AIM for awhile. Let us know what choices you make. Cindy
Thanks for all your replies and helpful feed back. My plan is to divide the ammount I will invest in each fund into 3-4 parts and invest the parts gradually. Also plan to have the cash amount equal to VWave. I know we will hit a bottom at some point but my stomach turns over when I wonder when. What a wretched time to be investing! Or will it be a major opportunity? Hmmmmmmmm-
Cindy
A few questions. I started buying OIL at $21 and below $40 a barrel. I thought I understood contango but I clearly didn't know how it would play out. Now oil is @ $40 a barrel and OIL is below 17. If the price of oil continues to go up, can I expect OIL to follow? And is OIL good to hold here in your opinion? I plan to AIM sector funds so should I trade OIL for IYE and own the companies instead? Surely would appreciate your feedback.
Also I remain very excited about AIM but I have had some bumps in choosing ETF's. I am planning to end up holding Global Telecom IXP, Utilities IDU, Tech IYW, IBB, Real Estate IYR, Steel SLX and Commodities GSG. I rethought XLF and am replacing it with KRE. Any suggestions?
If the market hits a bottom and continues in a trading range which may be possible, won't AIM do well? I remember in one old message someone (probably Tom) mentioned the courage it took to stick with AIM throughout the bottoming process of the market. And does it! Some of you have shared how you are managing. It would help me to hear how others of you cope. Do you raise cash, buy options or reverse ETF's?
Thanks for all your help. Cindy
OK, I'll confess. I recently started multiple AIM accounts with XLF among them. I have since been wondering if I were crazy but I kept out a good amount of cash and don't expect XLF
to go up soon. I have bought more at lower prices as AIM tells me to because I do believe our financial system will recover at some point. If the experienced folks on this board think I'm crazy, it's not too late to tell me. Thanks, cindy
Hi, Toofuzzy, Good advice. I have bought sector ETF's and am happy with the choice. If anyone can be happy in these trying times. Buying as an investment goes lower is a different and unsettling experience. I'm just focusing on the long term with the belief that it will work out in time. I like this much better than trying to second guess the course of growth stocks. Yes, I'm losing money as the market goes down but I was also losing getting stopped out. It is rather nice being able to buy at better prices. I can see a time when I may be pleased with a pullback. I do appreciate hearing the experiences of all of you who have done this for awhile. There's a lot to learn. Cindy
Thanks, AIMster, All you say makes good sense. Saving as I go, I can make it work or I will make my own. I find I rely on the AIM calculator and I could make an AIM spreedsheet just to record progress. Thanks again for your help. Cindy
DEar AIMster, Thanks for your help in explaining about adding cash to the Bare Bones spreadsheet. I'm afrad I do need more details. I have been trying to make changes only in the yellow areas as Bill warned us to do but this will not work with new cash or vealies. I just did a vealie by adding the price that would trigger a sell, then instead of selling I increased the portfolio controll by 1/2 the sale value, all in the same row. All looks ok. Will this mess me up?
There's no area to add notes so in adding new cash can I just start a new line and add the cash and new shares and change port control as appropriate?
I appreciate your help.
Clive, Thank you again for your help. I can handle a portfolio of sector ETF's. I have played around with zig zag for IBB to choose a percentage that has several buy/sells a year then added 2x minimum order % + Buy Safe + Sell Safe (adjusting minimum order size) to match the percent used in zig zag. If I have figured well I should have some action during the year. Is that right?
I really like your suggestions about how to use 1x and 2x together. Knowing me I am going to want to try that but not yet. I would like to get some idea of how more basic AIM works and how it feels emotionally. After being beaten up by this market I think I need to go slowly. Happy investing to us all! Cindy
Tom, I have spent hours reading all the very old posts and have learned the answers to most of my questions. What a gold mine the old messages are! Thank you so much for your messages now and in the past. I'm feeling more confident that sticking to sector ETF's is the way for me to go at this time. Also got the message that larger trades less often are more profitable than small and frequent. Is there a collection of old winning messages somewhere on the Board? I have started my own but it would be nice if it already exists. Cindy
I am using Bill Riedeman's Bare Bones spreadsheet and am confused about how to add new money (dividends or contributions). Can you please help or refer me to help? Thanks. Cindy
Thank you very much, Tom and Clive. I have discovered the 2x ETF's which will certainly provide the volatility that AIM seems to like. Also the 2x sector ETF's through Proshares. One thing that concerns me is the low volume. Is that a problem with AIM? Would a portfolio filled with 2x funds managed by AIM work well? It seems like that would be a way to deal with volatility- profit by it. However, many 2x funds lost 60% plus during the last year so risk management would be important.
I actually discovered AIM after I realized that the only thing that was making me money in this market was buying SPY when it was in low 80's and selling at 90. Slow but sure. Good to know all of you have been making money this way for years and in an ordered way.
Clive, Your suggestion is intriguing but a little too sophisticated for me at this time. Let me try the basic, then I will get back to you for more suggestions. Cindy
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