Hello Leapyear,
I have also seen the discussions on updating frequency, but never agreed with the arguments that updating should only be done monthly, or at any other fixed period. You stated:
The market is dynamic and so should AIM. By this I mean that the market should dictate if the update is Daily, Weekly or Monthly.
With respect to the dynamic aspects, may be the tinkers among us could create the DYNAMO AIM which would create a lot of charge in to AIM investing!
Seriously now, I can't imagine anyone on this Hyper Board, or rather any serious AIMer, that looks at a stock he is AIMing only once a month or only every two weeks, let alone every Quarter! It would be like a politician that only watches George Bush only once a month!
With respect to AIMing there are various ways of managing an AIM portfolio. If you look only once per month at your stock you can miss significant dips or peaks in that month, and the purpose of the AIM is to catch these Volatility Extremes. If you ignore that the AIM is just like a flat tine: A flat tire is a still a tire, but it most important fact is that it is flat! It needs fixing!
In practice AIMers already will look at the market every few days, and if they notice a big change they will jump into action even though they call them selves Monthly AIMers: At least with half an eye they will keep tracking their investment. So, my point is more like yours: If the market moves it IS the signal to do something or to sit tight. If after a month nothing has happened it might de a good thing to pick a more volatile stock, or to increase the aggressiveness of the AIM. Even with MACRO AIM one might miss various cycles within a sustained upwards or downwards movement.
My suggestion is also that the market should provide you with information as how you can best update the AIM, and for some stocks that may well be a daily update. I would hate to miss a few large fluctuations with a week.
My advice is to update when necessary: For some people that may be a move 10% but for others that may be a move of 50%. I would love to AIM a penny stock wit a 50% daily move! It is not important if I do not get many opportunities to do this, or if such stocks are usually very risky(a risk profile is a selection issue , not an AIM issue). The point is that closing your eyes for a month may cause you to lose a lot of Portfolio Growth Opportunities.
My vision for a Perfect Vortex System is to have an automatic daily price downloaded and then automatically let the program decide of the update should be done or not. This way I would only have Trades recorded and the system memory would not be loaded up with garbage(data on which no trade is made). At the same time the system would decide when a parameter optimisation is needed, and carry it out when needed. I would still be the "driver" for this Super AIM and would override it, if necessary!
Conrad
AI
