A.I.M. Users Bulletin Board

[SFSecurity]

Hi Gang, Sometimes it is very confusing as to what the correct letters/symbols are to get things. Yahoo online does not seem to like ^MMX for the Mexican Bolsa. You have to search for MEX Bolsa and then you get IPC (^MMX)! Bloomberg uses MEXBOL:IND. Weird.

Anyway, I've been reading "Value Averaging" by Michael Edelson and it is and excellent read. He explains Returns and Compounding, Risk and Standard Deviation as well as having some excellent historical charts. But what is really great is his analysis of DCA and Value Averaging, especially avoiding taxes and trading costs, areas not discussed by Lichello, although Lichello does suggest not entering trades that are too small.

Edelson then goes on to talk about Playing Simulation Games and provides enough information that one can construct a spreadsheet to work with.

His final area is Profiting from Overreaction and is quite interesting as it somewhat ties into AIM in thinking.

I highly recommend reading it even though the data is quite dated being from 1989 and before. The reason I suggest this is that you can refresh your understanding of some basic calculation as well as seeing his comparisons to DCA.

I got my first edition copy from Alibris for $0.99 plus shipping of $3.95. There is a second edition from 1993 for $3.00 and a version from 2006 that costs $6.95, plus, of course, shipping.

Anyway, back to the tax avoidance and transaction cost avoidance I think I accidentally hit on an element of this myself when I upped my % sale from 5% to 30% - see post #41763. Doing this increased my theoretical return on the backtest of SPY by about 3%, taking it above inflation. Had I not tried that I would have gotten less than inflation.

It appears I got bit a bit from the tax angle last year what with the trades I did with AIM, not at all badly but not great either. For the future I'm going to try to calculate taxation when deciding when and how much to sell. TDAmeritrade allows one to sell highest priced positions, which helps a bit and since the trade cost is $9.99/per that is not all that big of a deal but it is not to be sneezed at as someone pointed our a while back.

Best,

Allen