Hi Adam,
I read Robert Lichello's book on the AIM system in the early 1990's, but I ended up developing my own system because I felt that AIM had several drawbacks:
1. Lichello originally intended for AIM to be applied at the portfolio level. Thus, there would be one portfolio control and one cash. The problem with this is that individual stock movements cancel each other out, thus dampening volatility.
2. While AIM can be applied individually to each stock, I felt, as an evangelist for simplicity and elegance, that this was a bit too clunky and complex - having to track separate controls, safes, cash, etc.
3. I also didn't agree (when trading individual positions) of portfolio control increasing during down cycles, and not increasing during prolonged bull moves.
Note that these views don't mean that I think AIM doesn't work. AIM and the Stock Trading Riches (STR) systems are cousins and any re-balancing system is a good approach to the market.
The basic Stock Trading Riches system is to build a portfolio of many positions. Each individual position is assigned a constant value (which never changes) and is rebalanced once a year. Growth happens at the portfolio level. The portfolio consists of the individual positions and a cash balance. At this level, the system uses constant ratio balancing to have a maximum cap on the cash level. For example, the default value is 30% cash.
If cash builds up over 30%, then the cash is used to add new positions.
So my system is more longer term and closer to investing on the trader-investor spectrum.
