A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi I, I see Clive's already answered your question.

You can take the price discounted by whatever increment you would like and then see what AIM would have you buy at that price/shares. As Clive mentioned, the bigger the incremental discount, the bigger the "next buy" will be.

The "cash burn" rate can be further slowed by stretching out the "time" component as well. Delays of 30 days or 60 days will also slow the rate at which you add to your AIM accounts.

Using a start cash reserve of 50% and Lichello standard SAFE settings, assuming a long, slow decline, AIM will consume the reserve with about a 50% discount in the price/share. So if you started your investment with 50% cash and a $20/share price, you would run out of cash when the price/share hit around $10.

The "time value" of that cash can become relevent with long bear markets. Even though the cash isn't yielding much, it might be paying more than the dividends on some "growth" type of stocks. So, deploying the cash slowly has a slightly better time value because of yield.

An alternative to buying all that AIM says at a 5% discount would be to only buy what you've decided would be a minimum purchase. You'll be "underbuying" but your cash will last longer that way. The pent up buying pressure could be satisfied at a later date as the discount gets deeper and deeper. However, this requires you to then adopt a "timing" mentality which is somewhat contrary to AIM's.

Best regards, Tom