A.I.M. Users Bulletin Board

[OldAIMGuy]

Welcome Lou,
Re: Designing a portfolio of AIM managed holdings......

There's been a good long term study on a portfolio design called "The Ultimate Buy/Hold Strategy." Some here, including myself, have adopted it in various forms as a basic equity and income structure and then eliminated the "Buy/Hold" part of it and instead used AIM for each component. It thus becomes the Ultimate Buy and AIM (UBA) Strategy by my way of thinking. It has a good long term track record and gives incredible global diversification if carried all the way to Portfolio #6. Here's a link to info on the portfolio design. Their results represent, I believe, annual rebalancing, but always being 100% at risk (invested).
http://www.marketwatch.com/story/the-ultimate-buy-and-hold-portfolio-2016-02-18

You can pick and choose your own flavor. If it's a smaller account like your Roth IRA, then you'll only be able to divide the account into maybe 2 or 4 pieces and still have viable individual AIM accounts. That will be less diversification for now, but still should work okay. With your larger accounts you can sub-divide the total to a greater degree with more AIMed components. Generally the closer you get to Portfolio #6, the better the overall performance. However, there are big shifts over the history. Sometimes the "international" components win the day, sometimes emerging markets, sometimes domestic small cap and some years bond funds or REITS.

Or, just put a few of the total pie pieces in the Roth and the rest in other various accounts. For instance, you could tuck the "income" components into a taxable account where you can draw on them for cash flow/living expenses as they don't trade very often. That would be ~40% of the total pie represented there. The remaining 60% could be divided into some of the tax sheltered accounts, etc. The total pie would still be represented.

This year my IRA turned in ~7% overall gain with approx 20% to 25% sitting in cash. (the "Morningstar World Allocation benchmark turned in 4.4% so far this year by comparison) I doubt I'll be invited to speak on CNBC with those results, but I'm not embarrassed either. This year was "won" mainly by domestic growth and value components. The exUS stuff generally did okay except Emerging Markets. REITs and Income components have see sawed throughout the year.

Here's the old AIM-Users.com entry which traces the UBA back a long time: http://web.archive.org/web/20120830055525id_/http://www.aim-users.com/etfunds.htm

Here's how the UBA retirement account looked at the start of 2016:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=119779551

Here's a number of the components all graphed together.
http://stockcharts.com/freecharts/perf.php?FVL,dem,des,dim,dln,dls,don,drw,iau,jnk,psk,schp,vnq
You can stretch the X-axis to any time frame you want. All the wiggling along the way is what drives the individual AIM engines for each components.

(Note that the World Allocation benchmark for 2013 is an error and should be 4.40% instead of 9.31%. It seems to stack up reasonably well.)

Please feel free to ask questions and again, Welcome.