When AIM sells to the level determined by Safe, then there is an extra 10% left for rebalancing
I never thought about it that way. That is true and maybe why it gives an extra boost. With straght AIM, safe is a governer but at a cost.
This action is similar to XDEV, where you also trade what is above Safe and the 10%(or whatever is the bandwidth). There is an extra strength in 'AIM with 4 stocks' vs XDEV when you go down a lot, or up a lot. There is more safety here than in XDEV(portfolio safety) plus there is the rebalancing effect.
The re-bal does capture any deveation from ave port value even when AIM is not giving a signal. This would be very benificial in a case where you might run out of cash Too. You wouldn't be dead in the water because you might be told to trade one stock for another by the re-bal rules thus allowing for a position even though your out of money.
I think X-DEV is quite a good method or at least seems to be. My only problem with X-DEV and similar things is that you become a "slave" to the market. AIM on the other hand can be ignored from month to month. To me this is worth a lot.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.