Hello Byculla,
I used fundamentals to pick AIM stocks and used AI to manage them many years ago. However when I wrote the Pragmatic Investor, I switched all my AI portfolios over to PI.
Then in 2008, I started using the new PI algorithm and have not looked at another system since.
I still think AIM is an excellent investment strategy and it performed relatively well (compared to the S&P500) when I was using it. However the new PI has outperformed AIM by a wide margin and I plan to continue using it for the majority of my portfolios for the forseeable future.
However I don't rule out using AI again for a smaller percentage of my portfolio (probably 10%). One of the things I mention in the PI book is to diversify your investment strategies as well as your holdings. So I will most likely follow that advice, however right now I'm strictly PI 3.0.
I'm also looking to backtest some options strategies with PI and AI, but that is in the very early stages, so I don't expect I'll be using that with real money anytime soon.
If you are thinking along the lines of using VSS to find good stocks to AIM with AI, then I think that is an excellent way to go.
I would find the top rated VSS stocks, use VSS's asset allocation function to find a group of these stocks with low correlations between them, then enter each one in a separate AI portfolio.
Then run an optimization on each one and select a reasonable set of parameters for each portfolio. Finally I would use AI to manage them with those parameters and using the MACRO filter.
That's what I would do, but you have to decide what makes you most comfortable.
Of course if you don't want to optimize the parameters and you're only interested in using AIM BTB, then you actually don't even need AI.
Tom Veale's website has a free AIM spreadsheet and Don Carlson has posted his MACRO algorithm which you can incorporate into the spreadsheet (or someone on the AIM board might have already done it -- so just ask over there).
Without AI you'll lose alot of really good functionality and research potential, but at the end of the day you still get the AIM benefits for free.
