A.I.M. Users Bulletin Board

[aptus]

Hello Jers,

Lichello stated that he liked to keep his cash reserves separate for separate AIM programs because he didn't like one taking cash from another.

Since he started all of his programs with a fixed percentage (e.g. 50/50), he would simply divide his cash into, say, 6 equal portions and be on his way.

However with AI you can actually have different AI portfolios (which are equivalent to Lichello's AIM programs) using different parameters (so one could be 50/50, another 67/33, another 80/20 and even a customized one, such as 100/0).

If that's the case, I would suggest that you split your total cash reserve into 6, weighted by the cash parameters you're using.

For example, if you have 2 portfolios, with a total value of $200, and one is 50/50 while the other is 80/20, then you would allocate $100 to each portfolio -- assuming you're diversifying equally over your funds.

Portfolio 1 would contain $50 equity and $50 cash. Portfolio 2 would contain $80 equity and $20 cash. You can expand this for your 6 funds.

If you use the same parameter settings for all your funds, then just divide the total cash reserve equally.

I hope that helps.