Hi Evil,
Maybe some more experienced in AIM than I am can chime in here.
What had been discussed was whether studies had been done about the benefits of implementing purchases when the AIM algorithm indicates a purchase should be made, especially if a previous purchase was made just a few days earlier; or, whether one should delay making consecutive purchases for at least 30 days. Lichello even spoke about this in his book (I can’t remember exactly where….would have to look it up).
When AIMing a volatile, deep-diving security that is rapidly dropping in price one can run through their cash account very quickly if they make purchases each time the AIM algorithm indicates.
My response is that I feel this is more of a function of the volatility of the portfolio. If one has a low volatility portfolio of mutual funds, such as I do, then AIM directed purchases are few and far between, and the 30 day rule has no real value.
However, if one were AIMing a “deep diver” stock, like Bear Stearns, for example, then they would have used up their cash in a hurry and the stock could continue to keep falling. By delaying consecutive purchases at least 30 days, you allow time for the stock to consolidate and possibly form a bottom before you begin spending your money “like a drunken sailor” (Lichello’s words).
As I said, perhaps others can join in and perhaps help you here.
Regards,
Ray
