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?
Hi, Jim,
Welcome. Good question.
One can think of Lichello's original AIM as by the book as a template. One must keep in mind especially the time that he was developing it, the mid-to-late 1970's on the heels of the 1973-1974 bear market. Personal computers were in their infancy, to buy or sell stocks was done under fairly expensive commission rates, information was at best derived from the daily newspaper or public library.
Even Lichello himself revised his system from the original first edition 50/50 ratio to subsequent 67/33 to the final AIM-HI 80/20. So he wasn't adverse to change, nor did he mandate that the 1.0 version of his system was the be all and end all for this type of system.
What you'll find is that people have been taking the core idea, a algorithm to encourage the "buy-low, sell-high" idea and trying to make it better. One limitation, for example is that available cash is finite. So what's the best way to have enough cash so that you can still buy at the bottom and not run out too early? Should one AIM each stock individually or as a whole portfolio? What about ETF's - investing instruments that didn't even exist when Lichello started working his system? With more information available over the 'net, how do you separate the good stuff from all the fluff?
Also where people are with the amount of money to invest will influence how they proceed. A person with $100,000 to invest has more options than someone with $10,000, for example.
AIM falls in the general class of investing strategies known as "core position trading." Google that term to learn of even more variants, if you wish.
Thanks for your question! If you have more, please post away!
Best,
AIMster
AI
