There were attempts to improve the AIM algorithm by reducing cash reserves. This did result in better returns in certain circumstances. Being "mathematically challenged" I don't know what is best to do. I'm sure there are better returns to be made, but I wouldn't throw over AIM's safety and capital protection lightly.
I agree. On the other and take retailer Wal Mart. B&H them from April 1980 with a $10,000 investment and you're sitting on $3,000,000 plus now. Use AIM and you'd have $65,000 plus. Yes, only 24% of your money would have been at risk. This test done, by the way using Lichello's original 50/50 formula, likely what would have been available to you in 1980. Of course one would have had to have a lot of faith in what was then a more "upstart" company. Going with the then long established IBM would net you $70,000+ using AIM, $153,000+ at the end of the day using B&H.
My point is not to discredit AIM, in a shorter time range the result may be quite different, or with another stock that's more amenable to AIM's methodology. My point is that at whatever point we start, the unknowable future makes any investment, any system a guess, at best. As I pointed out in a comment in the NY Times today off of Dr. Krugman's article (he being a Nobel prize winning economist):
"...If the proverbial dominoes are falling faster now than in the 1930's depression, it is likely due to a perverse side effect of globalism and all the interconnectedness that was supposed to improve things. Obvious in this latest stock market swoon was how correlated everything has become. It used to be if the market was going down here, it would be going up there, one could protect one's portfolio by international diversification, Now it's all gone down together, no matter where, so we've all been cheated.
And the band plays on to the elites of the political and financial circles, probably because the level of pain isn't enough yet, unemployment is still only about 1/3rd of the peak in the Depression. Small solace to the recently unemployed.
It's going to take political will and courage to bring to heel the current banking establishment with the lax regulations and free spending ways. One can expect them to howl and pay lobbyists beaucoup bucks to maintain the status quo. But if we are to learn from history and not merely repeat it we still have time, though not much, to make the systemic changes we need."
Emphasis added.
We roll the dice, pay our dues and hope we come up winners. AIM gives us a fighting chance, but maybe B&H still is a contenda, if only in a very long timeframe. And with much patience. Hmmm - I wonder if someone could come up with something that would compare B&H to say Synchrovest since we already can measure AIM to B&H. Just a thought.
Best,
AIMster
