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Re: OldAIMGuy post# 15185

Thursday, 02/10/2005 11:17:45 AM

Thursday, February 10, 2005 11:17:45 AM

Post# of 47147
It's interesting to note all the permutations and combinations of AIM. You might think AIM a complicated algorithm, but it is a simple variation of the granddaddy of all investing systems, the constant dollar plan.

With a constant dollar plan, you simply buy or sell enough shares to equal portfolio control. Lichello added two features to constant dollar to create AIM:

1. Since trends have a way of continuing, he created 'SAFE' to slow down purchases and sells.

2. Since stock prices have historically had an upper bias, he added portfolio control increment.

If you traded a constant dollar plan with regular increments to portfolio control (say 0.75% a month), you'd essentially be trading AIM with a zero value SAFE.

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