A.I.M. Users Bulletin Board

[lrp42]

Hi AIMster,

I know you directed this toward Tom, but I thought I might add an idea I have been toying with.

Recent history so far tells us that the VIX can climb all the way to a reading of 80 or so when there is great fear and selling in the market. OTOH, when the market is doing well and everyone is happy with their results the VIX can drop down to 10. Therefore, it seems to me that perhaps one could adjust their cash reserves based upon how the VIX is behaving.

I might be all wet on this subject, but it seems to me that if someone was opening a new position when the VIX was down around 15-20 they might want to keep more in cash.....say 50% or more. However, if the VIX was up around 50-60, where it is now, then they might want to keep only 20% in cash.....sort of an AIM-HI type position.

Anyway, just a thought of mine.

Best regards,

Ray