Thank you Clive, Re: Long Term AIM "by the book".................
Your example shows how well AIM manages the amount at risk. It also shows that AIM can be used as a cash cow during a primarily bullish period.
Period Cash Change Stock Value Change
'86 to -96 +150% +25%
'96 to '06 +31% + 6%
'06 to '16 +22% +30%
'16 to Date +19% -12%
One can use no limiting feature on cash as in your example. One can select a maximum cash threshold instead of using a moving target for cash. There are many ways to have AIM work and it will always help to manage overall portfolio risk if not altered to be something besides AIM.
Much of what is seen here is what prompted me to study AIM from a return on average capital at risk (ROCAR) point of view. The things we do to alter AIM should improve ROCAR more than the increase in risk exposure. http://web.archive.org/web/20120118093621id_/http://www.aim-users.com/aimchng.htm
This page was done for the purpose of exposing prudent AIM modifications and what their limits might be. The time frame was 1982 thru 1999 as that was the year I published this on the Internet. As you can see, my "by the book" shows much the same trend to build cash over long bullish trends. If the time frames were extended to include the next two decades I'm sure the more conservative models would have had far less draw down. Most likely the ones that pushed the ROCAR envelope would have had more times of reaching 100% being invested and more deep draw downs. Even so, AIM's resilience is remarkable when long term perspectives are used.
It takes a certain mindset to be an investor at all. Are we truly willing to risk our nest egg betting on the stock market? If so, to what degree. If we pick an investment what shall we do to manage it and the risk of being invested? AIM is one way. With modest changes from Mr. Lichello's original AIM it can be adjusted to suit an individual's risk tolerance. AIM BTB is a good solution for those with only moderate risk tolerance. For those interested in "benchmarking" their performance to some theoretical index AIM can be tuned to a higher level of total return but only by sacrificing some prudence.
Thanks for taking the time to put together the comprehensive study.