Hi Conrad, Maybe "risk" can be related to voltage.
Most would touch a nine volt battery to their tongue without much hesitation. They know there's going to be a tiny jolt, but nothing life threatening.
The stored energy of the battery can be used to run a remote control toy car, a radio, or other light duty application. Not a lot of driving force, but still it works.
Now not many people have gone inside a 480 volt three phase panel without knowing what they were doing. It's not the kind of environment that we'd want to touch one's tongue to! However, the voltage coming from that panel can be used to do many more things than the 9V battery.
There's greater "risk" involved with the high voltage panel, but there's also more potential productivity.
Now, AIM can be used with either low or high voltage investments, but it's still up to the user to understand the potential and the risks involved.
As you mentioned in one of your earlier posts, many investors do act on blind faith or are sucked up into the expanding envelope of market enthusiasm. I certainly know many people that have NO IDEA what the end product is of the companies in which they invest! They buy a ticker symbol only and treat it like a poker chip.
Because the market is driven to a great extent by psychological forces, it tends to be erratic. There's not much anyone can do to change that. Thank Goodness! After all, AIM was designed to capture the erratic price movements generated to a greater degree over time by the underlying neurotic behavior of the market participants.
I have, even after a two year bashing by the market lemmings, a significant "liquidation" profit in my portfolio. If I were to sell out today, I'd still owe the Tax Man a huge amount of capital gain tax. The reason has more to do with selection of stocks than of viewing charts or any other TA strategy. AIM has also contributed to the profit base of the account. It would take some time to calculate how much of the current residual profit is from selection and from AIM.
As there are many ways to run AIM, there's many ways to evaluate companies. It is very much easier to entice investors with a "trading scheme" than by telling them they need to do lots of homework! I say this because there's lots of advertisments on CNBC that talk about TA and chart services and almost none that offer to attempt to teach about company selection. I assume the advertizers know where the money is best spent.
I doubt I'll be invited as a guest to CNBC any time soon as what we do as AIMers is pretty dry stuff compared to listening to James Cramer!
Best regards, Tom
Port Washington, WI 53074
