A.I.M. Users Bulletin Board

[Make It Jake]

Hi Dan - a couple-few other things, now that the coffee's finally kicking in a bit.

* Waiting period before a second buy : When prices are falling, AIM wants to burn through cash buying more of the now-cheaper "inventory" to hold for later sale. Someone (likely Tom Veale again) came up with the notion of enforcing a 30-day minimum wait between consecutive buys as a hedge against running out of cash in a downturn.

* Minimum trade size : I'm not sure how applicable this is any more, given that it's possible these days to make very small trades, commission-free, at some brokers, but you'll likely see mention of setting a minimum trade size as a percentage of PC (typically 10%). When trades cost at least $10 a side, this made more sense to me than it does with fractional share, commission-free, trading, but I've kept it in my own AIM tracking anyway. Although, I'll admit, I've dropped it to a lower percentage with some stocks that would otherwise trade pretty infrequently. (It might be smarter to just rotate those stocks out altogether in favor of something more volatile. I kind of hope this comment will get some responses from the wiser heads here; I'd like better input on it myself.)

* And speaking of volatility : AIM likes to cycle cash into a stock at a (relatively) low point and back out again at a (relatively) high point. Since no one's getting any younger (unless we start figuring age in Centigrade, which has been a huge win for me) the more often it can complete a cycle, the better for us. Sites like stockcharts.com can show this graphically via the "Zig-Zag indicator" - giving you a picture of how often a given stock or ETF cycles through a swing of whatever percentage you enter. Here's an old message that talks about this. (Depending on how you set SAFE percentages and the minimum trade percentage, you may want to think about different values for the zigzag than 30%. Another point where I'd benefit from other people's insights myself ...)

With kind regards,
--MIJ