A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi SL, Re: Retirement account rebalancing........

Each sleeve of my IRA is being managed separately as an AIM account, so the rebalancing has been between Equity and Cash in each of those. Obviously the sleeves that have fallen the furthest have used the most cash, etc.

In that portfolio, I used to have it divided by industry sector, but not very broadly diversified with only 5 sectors represented. Last year I restructured the entire account (for better or worse!) to include 10 more general sectors, with "growth", "small cap value", "mid cap value", "intl value", "intl small value", "emerging mkts", "precious metals", "govt income", "real estate income" and "corporate bond income" as the categories. Of course the all important 11th sleeve is CASH.

The concept for this portfolio design came from an article at fundadvice.com ( http://www.fundadvice.com/articles/buy-hold/the-ultimate-buy-and-hold-strategy.html ) which is quite interesting in itself. That describes the components and all I did was apply AIM to the different pieces of the pie. ETFs and CEFs allowed me to do so with relative ease.

While these individual sleeves aren't as volatile as individual business sectors, I've expanded the breadth of my diversification overall. And, it's not as though the account's remained "tradeless" because of the changes. On average there's been almost a trade per week so far since January.

The diversification was desirable, but I didn't have the funding necessary to do business sector AIM accounts plus the other areas and have the individual sleeves be of "critical mass" for AIMing. So, this current portfolio is a compromise, and so far not too bad of one.

There probably will be a time in the future where the account will have grown enough in some areas that it will require some "inter-sleeve" rebalancing as well to get back to the originally selected weighting. Right now, though, AIM's just doing its Equity/Cash juggling act with each one. Ultimately if it grows enough, I'll be able to take the Domestic side and divide it into 10 business sectors representing the S&P500 components and AIM each of those independently.

Best regards, Tom