AI
Wednesday, October 09, 2002 10:56:03 AM
Hi AorB, Remember that one of the goals of AIM is to be periodically 100% invested. Start with the cash reserve that makes you comfortable and then let AIM take the burden of worry off your shoulders. When AIM's guided you to be 100% invested, then you will have done a good job under whatever the circumstances are. What more can you do?
The "crash" of 1987 was brutal. Nobody knew at the time it was going to last just a short while. AIM didn't know it. However, AIM did a magnificent job of buying the heck out of a nasty bear market. AIM didn't know that it was going to take two years for the NASDAQ Comp. to return to previous highs. It didn't know that the DOW was going to languish until after the Gulf War. It just quietly did its job.
No matter what Equity/Cash ratio you choose, you should be able to adapt to the circumstances as they present themselves. Should you decide to be conservative on the Cash Reserve side, then possibly you should also be conservative on the trade frequency end as well.
I suggest you document your feelings on the day you start your accounts. Include the reasons for why you chose certain variables like Cash Reserve %age, trade frequency, and selection process. Then when you review your accounts later under other circumstances, you'll have a firm base of information from which to guide your next moves.
A safe way to start AIM accounts is to ignore the actual market conditions and always start them as though we're heading for the worst BEAR market in history. This will help to contain one's enthusiasm!
Please feel free to as questions as your accounts take shape. Also, please keep us informed as to your periodic trades as this is instructive to all other readers - especially newbies to AIM.
Best regards, Tom
The "crash" of 1987 was brutal. Nobody knew at the time it was going to last just a short while. AIM didn't know it. However, AIM did a magnificent job of buying the heck out of a nasty bear market. AIM didn't know that it was going to take two years for the NASDAQ Comp. to return to previous highs. It didn't know that the DOW was going to languish until after the Gulf War. It just quietly did its job.
No matter what Equity/Cash ratio you choose, you should be able to adapt to the circumstances as they present themselves. Should you decide to be conservative on the Cash Reserve side, then possibly you should also be conservative on the trade frequency end as well.
I suggest you document your feelings on the day you start your accounts. Include the reasons for why you chose certain variables like Cash Reserve %age, trade frequency, and selection process. Then when you review your accounts later under other circumstances, you'll have a firm base of information from which to guide your next moves.
A safe way to start AIM accounts is to ignore the actual market conditions and always start them as though we're heading for the worst BEAR market in history. This will help to contain one's enthusiasm!
Please feel free to as questions as your accounts take shape. Also, please keep us informed as to your periodic trades as this is instructive to all other readers - especially newbies to AIM.
Best regards, Tom
Port Washington, WI 53074
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