A.I.M. Users Bulletin Board

[Tim Reese]

Thanks Tom, the LIFO idea is useful.

So, for the LIFO to be effective, you need to keep track of a baseline about which the fluctuations are centered, sp. the PC. But PC contains no concept of the overall market, so a market that goes down-down-down signals a buy-buy-buy. This is fine as long as the prices come back up (ie the company weathers the storm) or as long as the prices weren't falsely inflated to begin with (aka riding a bubble). This would seem particularly problematic with the high PE tech stocks that the board seem(ed) partial to. But I think this must be dry, dusty history to most of you.

I've been wondering about a sensible way to manage my 403b port. It's tax-deferred, and gets automatic contributions. It's almost all equities currently, trying to balance the bond funds in my taxable "savings". The port is as diverse as I can make it within the fund constraints; VQNPX, VUVLX, VISVX, VEURX, VPACX, VEIEX, VHGEX, VGPMX, VGSIX and VWEHX. I was thinking rather small cash fraction for each fund could be tolerated (say, 5%) and then I'd depend on the diversity to prevent me from running out of cash entirely. The total fraction of cash (actually a short term bond mix) would be kept to some fixed maximum of the total port, say 30%. When the cash exceeds the ceiling, the excess is contributed to the various funds according to the initial allocation percentages.

I can make as many as 12 round-trip contributions to each fund in a year, so I can't go wild with the AIMing. I am, however, free of fees and cap gains within that limit. BTW I'm also allowed to own almost any fund that Vanguard owns, except for the tax managed ones.

I'd be happy to hear more ideas, wild mild or otherwise. best regards Tim