A.I.M. For Exchange Traded Funds

[aaCharley]

Toofuzzy,

One thing that AIM does is to allow for significant movement before there is a buy or sell initaited.

With that thinking in mind, consider your rebalancing method. I do not have a spreadsheet for support or to test with. however, in thinking about the rebalancing, I "believe" that it is necessary to allow for a reasonable divergance from the desired holding before taking action.

I'm not sure how to apply this to a dozen holdings. But the simplified version of two funds is a good starting point for trying to think about it. The charting feature at MSN will allow you to compare two investments, with dividends included. Choose a couple of those that you are using and create a fairly long term chart including both - and with dividends included. I "believe" that this will give you some ideas on how far the divergence should go before rebalancing.

Something on the order of 20% looked good for several funds I was trying to compare. The problem with the annual method is that thee is no reason to expect that the divergences will be at a favorable relationship at that date - whenevver that is.

Regards
Charley