Hi Clive,
The question of weekly or monthly Reviews for an AIM Portfolio have been discussed ever since Lichello published his book on AIM. . .I have a 1977 issue that I bought in 1980 when I got introduced to Lichello's method by Chuck Chakrapani's Money Spinner from which I developed Vortex AIM. I have considered reviewing(looking at) my AMS portfolio only once a month rather strange. . .I have difficulty imagining any AIMER ignoring his AIM Portfolio generally and then having to look at his Agenda as to when he has to review his Portfolio again.
I find it interesting that you use the word "review frequency" as if it is the same as trading frequency. I am sure most people do a lot more reviewing that actual trading. Considering that most AIMers are rather technical "nerds" when it comes to their AIM Trading. . .quite opposite to the "target audience" Lichello to have had in mind when he wrote his book. Judging by the high level of technical curiosity and aptitude people on this Forum have demonstrated in regards to AIM-algorithms and AIM parameter variations my guess is that most active AImers keep a keen eye on the market an review their AIM Portfolio much more frequently than weekly and I venture to suggest many of then even review it daily and at least some AIM-wives consider their hubby AIM-addicts J
Of course I do not dare to suggest that AIMers trade as often as they review their Portfolio. From what I have been able to extract from almost 10 years of reading the AIM Forum I also feel that many AIMers also appear to consider AIMIng a challenging game and love to tinker with it, and analyse it to make it better. . .and also are prepared to respond to market movements in order to adapt the settings, apply filters and do a lot of things to prevent the pitfalls that are there when one does not "keep an eye on things", so that the trading frequencies as well as the trade magnitudes are adapted in response to what the market is doing. . .I would be amazed if that was not the case.
This brings me to your suggestion that "reviewing" monthly might provide an advantage of reviewing weekly. I tend to disagree, for one, without having an eye on the market by not looking at the market for a month. . .for many funds that is a long time. . .the price could well dip considerably and then return again so that a buy & sell opportunity is missed. By keeping a keen eye on the market one has at least an opportunity to get to know what is going on. . .which would allow him to wait 2 or 3 months or act fast. . .On my Spy Demo Portfolio I had about 7 trades in 18 month and I must have reviewed it I bet 100 times or more.
Buy more to the point, if a stock is in a diving mode and one would without any market savvy, with weekly reviews trade weekly and have burned his cash in 10 weeks he night have burned about the same amount of cash with monthly reviews. This of course depend on his SAFE values but the basic feature that causes a Cash Burn in AIM also causes a large Cash Burn after having waited a month:
Buy = (PC-V)-sV
If one waits 1 month then the value of V could have dropped a lot mote than if one had waited 1 week. So the Buy Advice after 1 month. . . specially if s is rather small. . . could be quite huge considering that the value V had dropped considerably so that the Lichello Brake -sV is rather small.
In contrast with weekly trading would occur 10 times in 10 weeks and considering that each trade amount would well be smaller than the trades done each month it might not take any longer to deplete the Reserve when trading ones a month. Admittedly, have not tested this out numerically but I could apply apply the Cash Burn Rate Brake much more effectively when I keep a frequent eye on the marker by looking at the prices every few days, which would allow me to buy and sell more effectively than not looking for a month at my AIM. . .keeping in tune with the market provides the opportunities to act effectively. . .Not looking at it provides no opportunities to intervene when it is opportune to do so and could make things worse.
AI
