Learning the V wave as a novice. I am embarking on use of my new Automatic investor software which I find extremely helpful. Can I get some advice on where I can interpret the v wave and i waves. I really don't have the funds to subscribe to the value line website. Are they any other resources I can draw from to evaluate my stock selections as well as managing my cash reserves and equities?
Slow down, Tiger! :)
That's quite a mouthful for one paragraph with a lot of things to consider!
1) The V-wave or former I-wave is a benchmark indicator to give a reasonable suggestion for how much cash reserve percentage to start with, were you to begin a new AIM program today. Basically it looks at the risk level in the market and increases the percentage of cash to start with as the Bull runs for a longer and longer time, knowing that when the Bear puts in an appearance, having all that cash will be quite useful. So there's no "long term" interpretation of this signal, per se, since it's only used when an account is being started, unless you just want an overall "risk meter" to see where the market is.
2) Automatic Investor is a great piece of software and Mark's put a lot into it, but in order to fully maximize the value, having a good understanding of AIM by-the-book will help a lot. Knowing how calculations are made will let you understand the process better, rather than treating AI as some "mystical black box," from which the computerized "genie" will pop forth from to control your destiny.
3) As for evaluation, Yahoo finance under statistics offers quite a bit of info. Particular information to look for (other than the long-term profitability of the Company) is the Beta - the measure of volatility of that particular stock compared to the market overall. The higher the beta, the more volatility, the more AIM can work with the stock. In theory, then, penny stocks should be awesome with AIM. However, few will use them for AIM other than with truly "mad" money due to the amount of risk involved. The greater propensity for these to "crash-and-burn," especially with AIM's wanting to buy more on the way down, would recommend avoidance or extreme caution with money you can truly afford to lose. On the other hand, it could be like a lottery ticket over a long enough time period. If there were only some way to have a mutual fund of penny stocks to minimize the risk... I suppose a micro-cap fund like RMT might be about the closest one can get.
Another good source of info is http://www.stockcharts.com. A picture being worth 1,000 words, seeing a volatility pattern with their zig-zag function can be helpful. Cost for basic charting is free. For example:
The zig-zag red-line, set at 30, shows the retracement from each buy-to-sell, based on the by-the-book settings of 10% SAFE and 5% Minimum trade for each side, buying or selling. From late '08 going into '09, AIM would have taken great advantage.
More questions, let us know!
Best,
AIMster
Slow down, Tiger! :)
That's quite a mouthful for one paragraph with a lot of things to consider!
1) The V-wave or former I-wave is a benchmark indicator to give a reasonable suggestion for how much cash reserve percentage to start with, were you to begin a new AIM program today. Basically it looks at the risk level in the market and increases the percentage of cash to start with as the Bull runs for a longer and longer time, knowing that when the Bear puts in an appearance, having all that cash will be quite useful. So there's no "long term" interpretation of this signal, per se, since it's only used when an account is being started, unless you just want an overall "risk meter" to see where the market is.
2) Automatic Investor is a great piece of software and Mark's put a lot into it, but in order to fully maximize the value, having a good understanding of AIM by-the-book will help a lot. Knowing how calculations are made will let you understand the process better, rather than treating AI as some "mystical black box," from which the computerized "genie" will pop forth from to control your destiny.
3) As for evaluation, Yahoo finance under statistics offers quite a bit of info. Particular information to look for (other than the long-term profitability of the Company) is the Beta - the measure of volatility of that particular stock compared to the market overall. The higher the beta, the more volatility, the more AIM can work with the stock. In theory, then, penny stocks should be awesome with AIM. However, few will use them for AIM other than with truly "mad" money due to the amount of risk involved. The greater propensity for these to "crash-and-burn," especially with AIM's wanting to buy more on the way down, would recommend avoidance or extreme caution with money you can truly afford to lose. On the other hand, it could be like a lottery ticket over a long enough time period. If there were only some way to have a mutual fund of penny stocks to minimize the risk... I suppose a micro-cap fund like RMT might be about the closest one can get.
Another good source of info is http://www.stockcharts.com. A picture being worth 1,000 words, seeing a volatility pattern with their zig-zag function can be helpful. Cost for basic charting is free. For example:
The zig-zag red-line, set at 30, shows the retracement from each buy-to-sell, based on the by-the-book settings of 10% SAFE and 5% Minimum trade for each side, buying or selling. From late '08 going into '09, AIM would have taken great advantage.
More questions, let us know!
Best,
AIMster
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