Hi Neko, Re: Reversion to mean............
AIM does expect the pendulum to swing in both directions. It also has built into it a "positive feedback loop" that tends to move the bracket's swing slightly upward with each cycle. This can help to compensate for a slight upward slope to the overall market price.
Automatic Investor, I believe, allows you to adjust that feedback loop, making the machine either less or more aggressive relative to one's interpretation of the future. For instance, if you felt the market was going to be range bound for many years, you would want to reduce the feedback to near zero. That would keep the buying and selling parameters nearly identical cycle after cycle during the range bound period. On the other hand, if you felt the market was going to grow at maybe 8% per year on average, then leaving the feedback in place or modifying it slightly might make the program more effective in that environment.
Of course all this depends upon one's ability to see far into the future.
Best regards, Tom
