Is their a different/better way to add extra money...??
Hi, Sno,
AIM primarily functions as a closed-loop system, i.e., you set up a given program and off it goes based on the parameters you define. You'll note Lichello only "grudgingly" allows for extra cash to be put in, something on the order of a Christmas bonus or some other irregular cash addition. He didn't really account for periodic saving with AIM, that was more allowed for in his earlier Synchrovest or with Twinvest as found in the 4th edition.
In theory any addition should be split between your original equity/cash ratio and Portfolio Control incremented by the full amount. Hypothetically if you were using AIM-HI and added $100, you'd invest $80 in stock, $20 into cash reserve, then increment PC by 100. If the price is in an uptrend, however, this is working against you as you're increasing rather than decreasing your average cost, reducing profit. Thus doing so regularly does tend to interfere with AIM's "automatic pilot" functionality.
If you don't want to affect things too much, I'd just put the lot into cash reserve. That way if you need more cash for later you'll have it and be good to go. In such as case I wouldn't increment PC. If the price is in a downtrend, you would benefit from a supporting, though perhaps not regular purchase. In that case, DO increment PC as you're changing the equity amount.
Best,
AIMster
