Systematic Investing Group

[OldAIMGuy]

Hi Bob, Re: Zero cost Averaging...................

I don't think we've ever had a direct discussion on this on the AIM boards. However, several have discussed over time the pleasant point in time when essentially all remaining shares of a holding are "free." That's the point when AIM has improved the portfolio value to the point that the initial purchase has been paid for through either capital appreciation or cyclical AIM trading.

It's been referred to as reaching a point when we're playing with the "house's" money. Of course, until one removes one's own money from the AIM program, we're all still playing with a combination of our own and the House's.

There have been times when I've arbitrarily removed $$$ from an AIM holding to start a new one. Usually I've taken out my 'seed money' and started the new AIM and let the remainder run.

I think the Zero Cost Averaging (ZCA) method does similar things, but in far larger trade sizes. It would seem a great way to build diversification in a portfolio by starting up new ZCAs with each completed one. Sort of like saving dried Marigold seeds from one year to start a new batch the next. The first ones cost some $$$ but everything after that comes at a very attractive cost!