Hi Husk,
The fact that we cannot predict the market moves is the basic tenet of many sensible investment mechanisms, but that should not prevent one from optimising the moves that are possible. The idea is simple: As the market dives you can arbitrarily set limits on investing your cash on a certain limit. Say you think that a 30 % drop is all that the Market will Bear...double pun...then you plant invest all your cash at the 30% drop-level(unless a plane hits a skyscraper just as you are to call the broker). Your move will still be reasonably safe. Remember that after a big drop of 30% the chances for bigger drops diminish as the prices drop. You can also wait till the bottom is reached and the reversal has set in solidly.
None of this has much to do with AIMing, except that AIMing is a mild systematic form of that same basic strategy(Price Driven Investing).
Within the framework of this strategy many investment actions are simply AIM structures without carrying the name. If you read Money Managers Reports you will recognize aim-like features all the time:
"In consideration of significant market indicators and general global responses to bla bla bla bla(Usually bla's from Allan Greenspan) we have taken the opportunity to divest a portion of our port Fat Mama folio to reinforce our liquidity position. We also, cautiously, increased our position in our promising Geese Portfolio. Indications from reliable sources are that our Geese Portfolio will be a veritable goldmine within an investment horizon of 1 to 2 years"
These high paid guys are secretly AIMing and for the rest they now nothing more that you and I. Like you say, a big thing of AIMing is beating the risk-odds by virtue of keeping our head on straight and remaining sensible...at the Top of the market it is very sensible to be cash rich and at the Bottom to be fully invested. Within this framework you play the game to optimise your moves, with whatever you know.
Conrad
AI
