A.I.M. Users Bulletin Board

[ls7550]

Cash is reduced from 44700 - 20,000 = 24,700

that 44700 figure was after the 20,000 had been deducted.

How to do the above? can you elaborate?

It's a judgemental decision, no hard and fast rules involved, just that cash % up at high levels often arises when share prices have dropped.

Generally you can leave AIM to run as-is, but it will tend to accumulate too much cash, especially if you're not drawing/spending any, or not revising PC upwards by inflation, or using Vealies ... or whatever. So at some point you might decide you have too much cash and that some needs to be invested.

AIM can run without any cash figure - its not a needed element to calculate AIM trades/signals. Only requires the price figure, and a record of the PC value. As such AIM can't really tell if you have too much or too little cash - that's something AIM'ers have to decide for themselves. The weekly vWave published figure is a useful aid in that respect.

RE: SWR ... that's a percentage initial figure that is applied at the start, thereafter its a numerical value, that you uplift by inflation. $100,000 initial portfolio, 2% SWR = $2000 drawn at the start as the safe withdrawal rate. If drawing yearly and over the next year inflation = 3%, then the amount drawn at the start of the next year = 2000 x 1.03 = $2060. If a year after than inflation has raged at 10% then the year start withdrawal amount = 2060 x 1.1 = $2266 ...etc. You can draw that monthly, so using the same figures initial SWR = 2000/year so $166.66 the first month, then next month increase that by the ongoing inflation rate adjusted to a monthly rate (if headline annual inflation is 2% = 1.02^(1/12)=1.0016515813. But that's better suited to the mathematical minded, many just opt for the easier once/year withdrawal choice.

Toofuzzy has detailed standard PC increases i.e. half of any buy trade values that AIM indicates, or the full amount of additional stock value added outside of that. Some use 50/50 when adding/withdrawing, i.e. large inheritance - add half to stock, half to AIM cash, increase PC by the amount of additional stock value. Personally I've more preferred to add/reduce by the ongoing proportions of stock/cash AIM had at the time, If 40% stock, 60% AIM cash and adding a inheritance, then add 40% to stock, 60% to cash (and again increase PC by the amount of additional stock value added).

Clive