A.I.M. Users Bulletin Board

[ls7550]

Hi Jim.

It seems in reading current and former posts that very few actually follow the AIM method as it is written. Everyone seems to tweek it to fit their own desires. So my question is: if this system is actually good why don't users follow it?

We tend to follow the concept rather than the literal.

Buy and Hold is flawed. It's a dynamic risk style that amounts to buying high, selling low (an anti-martingale style). AIM is a martingale style that has more constant risk - a buy-low/sell-high style.

There's a long winded mathematical proof that shows a AIM like style is the better choice overall.

Fundamentally it boils down to that under pure random conditions both martingale and anti-martingale are zero sum games. Under stocks however there are finite possibilities, a stock price cannot decline below $0.

Typically progressive systems give the player more paths to relatively small wins and fewer paths to relatively large losses. What AIM does is to use a progressive d'Alembert betting sequence style that aligns the few large losses with that of a zero (or low) stock price. When therefore the prospects of such a large loss are mitigated by using Index funds (that are much less likely to go broke) then the overall becomes a positive sum gameplay.

If you follow AIM religiously then you will never lose excepting if your underline holding totally fails. You can however tweak the classic settings to vary the amount before you become locked into 100% buy-and-hold type conditions. Those tweaks can uplift (or reduce) the volatility capture benefits encountered along the way. So the tweaking is simply attempts to improve upon overall investment rewards in reflection of projections (predictions). Where those predictions prove to be reflected into actuals then gains can be improved - get them wrong and gains wont be as good. Classic AIM sits somewhere in the middle of the two.

Best. Clive.