Hi BowlerBob
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Although, speaking of improvements to AIM, two ideas that made me reconsider using AIM as an investment strategy were Tom's development of the "Vealie" and the "I-Wave". The backtesting I had done in 2000 showed that Buy&Hold beat AIM, but I wasn't sharp enough to figure out why or what to do about it (beginning investor). Another idea that appealed to me was the suggestion to consider using trailing stops for buys and sells to reduce the number of transactions and increase the magnitude of those transactions. I think it was made by Toofuzzy.<<<<
I have found from experience that ANYTHING I change with AIM I end up doing at the wrong time. While some of the improvements might be good they end up being not much help. The point I was trying to make was that continuing to reach for higher returns is dangerous not that all new ideas are.
Implementing a split safe to enabling more buying and less selling in January of 2000 was the wrong time to do that.
Using Vealies will tend to keep you from getting the last sale at the top of the market.
The trailing stops wasn't my idea but I thought it interesting. Again it is hard not to miss the top. The stock has to pull back a bit before you buy or rise a bit before you sell. You will also miss some smaller moves.
So whatever investment system you pick I recommend that you stick with it and don't change it.
The reason that Buy and Hold did better when looked at in 2000 was because the market only went up for five years. That five years was a good time to accumulate cash for the coming crash, just like 2003 to 2006 was a good time to gradually build up cash.
People without the discipline of AIM are selling in this market because of fear instead of having the ability and fortitude to buy more.
Clive's scale trading idea seems rational. Whether it is better or worse than AIM doesn't matter. It is understandable, manageable, simple to use, and sets aside cash in a reasonable way for future buying opportunities.
An Idea that I had which is really a restatement of what most financial planners recommend is "Slow Aim".
Buy a number of diversified funds and rebalance once / year at most. You can buy one fund / year as you have funds till you own them all and then start rebalancing. In a market like this though, when EVERYTHING is down, it wouldn't be much help.
By the way the V-Wave (or formally the Idiot Wave) is very good allocation advise for starting an account. It is also good for taking the emotion out of investing when you see AIM having you either hold tons of cash or very little and the V-Wave agrees.
Toofuzzy
Take the road less traveled. It will make all the difference.
AI
