If i could relive my AIM life over, I would start my successful AIM program as follows:
1. Stock Selection - Choose only high quality discounted stocks. My choice A+ rated S&P stocks.
2. Money Distribution - Would use a 50-50 cash - stock division.
3. Stock Entry Level - Because I only buy discounted quality stocks; I would do a virtual BTB 50-50 monthly plot from the stock highest price, and would make an entry when the price averaged up. Example. I like this stock and it is 12.00 dollars. Its high was 22.00 dollars. I would enter on an average up price. If the monthly price rose to 13.00 dollars, my dollar entry amount would be the amount expended by the virtual 50-50. 3,461 dollars.
4. AIM BUYS---. If the stock declined after my initial entry, I would never average down as AIM suggest. I would AIM buy only on an average up basis. Back test on any stock, mutual fund or eft will prove that an averaging up AIM program reduces risk and increases profit.
Reliving my AIM life shows that an AIM averaging up program would have been an observer of a melt down not a participant.
5. AIM SELLS---. A tough category. However, I take a line from
LD-AIM.
"If one were to study the share turnover in Lichello's original 10-8-5-4-5-8-example; one would note that that on a LIFO basis the original purchase of 500 shares is never sold"
.
In my above example, my initial virtual purchase was at 22.00 dollars or 227 shares. All shares will be liquidated at or before the 22.00 dollar level. Usually I keep an average share monthly price, 15-20 percent above the average price, I will liquidate my position. The top of the AIM sell chart is 10.00 dollars. The top of my sell chart is my stocks virtual high.
However,on the AIM sell side, I could just as well use the method as written.
Regards
ocroft
