AI
Sunday, September 25, 2022 12:40:13 PM
Hi O.J., Re: Rolling an AIM engine into a new equity..........................
I believe Mr. L felt an existing engine could be run on different fuels. You can sell the equity in question and replace it with a new one of equal total value. That way one wouldn't have to restart with a new Portfolio Control. Further he talked about a single AIM engine with multiple holdings as his main thesis. So, maybe he was referring to a portfolio of stocks or funds and replacing just one component inside it.
I'm not sure this is any better or worse than any other method. I don't think he specifically addressed a single investment AIM account and how to change out an investment, but would have to check the book. He said maybe multiple AIM accounts might out-perform a single one with multiple equities but said he wasn't sure it was worth the extra effort.
Back in the '80s when I first started using AIM I ran my portfolio as a single AIM engine. Then I started concentrating certain sectors as separate AIM engines. Finally I switched over to individual AIM engines for each investment. Much has to do with the total portfolio's current value. If it's just $10K then a single AIM engine will work fine or maybe Grabber's LD-AIM. I think10K is about the smallest one can effectively make a traditional AIM work. However, if one has $100K then one could easily run multiple AIM engines quite effectively.
In my "Sandbox" individual company stock portfolio I have 10 stocks. Each is a separate AIM engine. When I've left one to start another, I take the value of the 'old' stock as sold and start a new AIM engine with a new Portfolio Control and set the Cash Reserve where the old cash level was. In essence, just like starting a new investment with AIM.
Hope this helps,
OAG Tom
PS: it's funny how things come full circle sometimes. In the New Millenium I started using Sector ETFs a lot. They offered some of the benefits of owning a single stock such as greater frequency and amplitude of price movement compared to traditional mutual funds and also some of the benefits of having greater diversification. Not "sector" diversification, but lowering Single Stock Risk.
I believe Mr. L felt an existing engine could be run on different fuels. You can sell the equity in question and replace it with a new one of equal total value. That way one wouldn't have to restart with a new Portfolio Control. Further he talked about a single AIM engine with multiple holdings as his main thesis. So, maybe he was referring to a portfolio of stocks or funds and replacing just one component inside it.
I'm not sure this is any better or worse than any other method. I don't think he specifically addressed a single investment AIM account and how to change out an investment, but would have to check the book. He said maybe multiple AIM accounts might out-perform a single one with multiple equities but said he wasn't sure it was worth the extra effort.
Back in the '80s when I first started using AIM I ran my portfolio as a single AIM engine. Then I started concentrating certain sectors as separate AIM engines. Finally I switched over to individual AIM engines for each investment. Much has to do with the total portfolio's current value. If it's just $10K then a single AIM engine will work fine or maybe Grabber's LD-AIM. I think10K is about the smallest one can effectively make a traditional AIM work. However, if one has $100K then one could easily run multiple AIM engines quite effectively.
In my "Sandbox" individual company stock portfolio I have 10 stocks. Each is a separate AIM engine. When I've left one to start another, I take the value of the 'old' stock as sold and start a new AIM engine with a new Portfolio Control and set the Cash Reserve where the old cash level was. In essence, just like starting a new investment with AIM.
Hope this helps,
OAG Tom
PS: it's funny how things come full circle sometimes. In the New Millenium I started using Sector ETFs a lot. They offered some of the benefits of owning a single stock such as greater frequency and amplitude of price movement compared to traditional mutual funds and also some of the benefits of having greater diversification. Not "sector" diversification, but lowering Single Stock Risk.
Buy from the Scared; Sell to the Greedy.....
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