A.I.M. Users Bulletin Board

[SFSecurity]

Hi Adam, You pointed out the one of the problems with too much cash better than I did.

The other problem with high cash is that, unless one places it in some position with good returns, the brokers don't pay all that much in interest, roughly 0.1%, so, say you have a typical market return of about 6% and you have 50% in cash, then your real return is only about 3% return on your total. Slightly better than listed inflation, but not real life inflation as I experience it. I track my real life inflation by looking at what I buy to eat. One of my favorites for years has been flank steak. About 6 years ago I could buy it at $1.79/lb. Now it typically runs $4.59/lb. That's only 16.99%/year. Ouch.

Not all things are that bad, but I figure my real world inflation is around 5-6%/year in the San Francisco Bay Area. This means keeping s high percentage in cash dooms one to losing ground overall.

With AIM and selling PUTS and CALLS I'm staying ahead of this a bit but not by any huge amount. I wish I better understood what you do with your trading, Adam, and how to find positions worth taking a risk on.