A.I.M. Users Bulletin Board

[Toofuzzy]

Hi Kencc RE Questions

>>>>A couple of things I'm not sure about in your post (and my comments may well be wrong):-
With LD-AIM I would use 5% SAFE and 10% minimum order size. This is important. That keeps the next first trade the same but slows down consecutive trades a little.

My impression is that 5% SAFE and 10% min order size triggers the first trade earlier and speeds up subsequent trades compared to Classic 10% SAFE and 10% min order size?

In general I like to keep the starting CASH the same as the starting ACTUAL stock because of the leverage
I'm not sure why keeping the CASH the same as the starting ACTUAL stock is related to the leverage. I would have thought that CASH can be larger or smaller than starting ACTUAL stock depending on how many buys/sells desired?

My main comment however is that use of LD AIM is usually linked with "leverage". Now that I'm retired I'm far more risk averse than I used to be and I avoid anything connected with "leverage". Therefore I've not thought much about LD AIM before. But now I understand it better, it could be said to be more conservative than Classic AIM in a bear market if the buy&hold part of Classic AIM is set aside through the use of LD AIM - but I'm still thinking about it.<<<<<<<<<

All good questions:

1) Clasic AIM is 10% SAFE and 5% MIN ORDER SIZE (not 10% and 10%). So making it 5% SAFE and 10% min order keeps the first trade the same size but increases and spreads out subsequent trades.

2) I like to keep the starting cash at LEAST as much as the $ amount as the stock. That usually allows for the same # of BUYS as sells. LD-AIM is a pretty agressive buyer percentage wise as a stock (or fund) goes down). Yes starting cash is related to the # of buys you can do. I found if you want your BUYS and SELLS allowable to be the same then you need at least as much cash as the stock you bought.

3) LD-AIM can either be agressive or conservative. I would not tend to use it for investments that pay more than Money Market Rates BUT:

Why on investments that you never trade that do not pay a dividend? Put that money in a MM Fund instead!

So Agressive LD - AIM:

I have 15,000
I will put $7,500 in stock and $7,500 in cash, PC will be $22,500

Conservative LD - AIM:
I will put $3,300 in stock, $3,300 in cash (for AIM program), PC will be $10,000, and I have $8,400 to put in a MM account or short term bonds or to diversify with.(the $10,000 = PC is based on normal AIM $15,000 = $10,000 STOCK, $5,000 CASH)

Since with normal AIM you would be using $5,000 as cash (33%)even keeping cash as equal to starting stock reduces the # of BUYS you can have. That is why I would use that as a MINIMUM and why you rightly questioned it.

Toofuzzy