This morning I tried ChatGPT at chat.openai.com and asked the question, “How does Automatic Investment Manager by Robert Lichello work?”
This was my answer within 3 seconds:
“Automatic Investment Management (AIM) is an investment strategy developed by Robert Lichello in the 1970s. The strategy was designed to help investors manage their investments automatically using a set of rules and formulas. The basic idea behind AIM is to use a mathematical formula to determine when to buy and sell investments, such as stocks or mutual funds, in order to maximize, returns while minimizing risk. The formula used by AIM is known as the “money management formula” which takes into account the investors available funds, the current value of the investment, and the desired level of risk.
The money management formula is designed to automatically adjust the investors portfolio by buying more of an investment when its price is low and selling, when its price is high. The formula is based on the premise that investments tend to follow a cyclical pattern, with periods of growth, followed by periods of decline.
The basic steps of AIM are as follows:
1. Determine the amount of money available for investment (the “investment fund”)
2.Decide on a “value per share” for the investment. This is the price at which the investor wants to buy or sell the investment.
3. Calculate the “action limit” for the Investment. This is the maximum amount, the investor as willing to invest in the investment at its current price.
4. Determine the “buy point” and the “sell point” for the investment. The buy point is the price at which the investor will buy more of the investment, while the sell point is the price at which the investor will sell some or all of the investment.
5. Monitor the investment and make buy and sell decisions according to the money management formula.
The AIM strategy can be applied to a variety of investment types, including stocks, mutual funds, and exchange traded funds. However, it’s important to know that AIM is not a guaranteed way to make money and may not be suitable for all investors. It’s always important to do your own research and consult with a financial advisor before making any investment decisions.”
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Artificial Intelligence is on the move…
Best regards,
Jon
