A.I.M. Users Bulletin Board

[AIMster]

I recently opened an AIM portfolio using the 50% cash reserve method. My fund has been going up. Do I ignore a market order to sell stock as long as I already have a 50% cash reserve?
If the answer is yes, won't I be missing out on a lot of cash eventually?
I probably am missing something.

Hello! Glad to have you here. Good that you've got the system working for you and given where we are right now, Lichello's original formula is not an unreasonable choice. Of course, there are those who favor using a current market mettric like the V-wave to set up the initial AIM cash reserve level, rather than a specific default level, per se. Keep in mind that going "by-the-book" is an acceptable practice.

Given how toward oversold the market's been, some movement toward "up" is not surprising. Regulation of the cash reserve (in both directions) is one of the key issues in AIM type strategies. Some other users once upon a time came up with the concept of a "Vealie" named for our moderator. A detailed explanation can be found here: http://www.gsnindia.com/Help/Vealie.htm So the choice in an upmove is to follow AIM's guidelines and sell as directed, or pull the Vealie and defer that particular sale. Other sales will likely follow in the future. Of course, with the present market uncertainty, having at least 50% cash reserve to start will give you a fairly good cushion to work with.

Hope this additional info helps - if you have any more questions, please post them!

Best,

AIMster