Backteseting the AIM system with the AI software.
I recently started the AI free trial and want to commend you for developing this software. It is very versatile and much better than competitor products for AIM. I was very excited about discovering AIM and after reading all of the reviews about the Lichello book on Amazon, I thought it must be an incredible strategy. But, when I back-tested it using your software, I found disappointing results. I did many tests, some going back to 1980. Then I focused on the last ten years reasoning that the grand bull market was over during this time, there were very significant gyrations in the market over the last ten years, but in the end, the market rose during this time period. However, very few of my AIM tests were able to beat a buy and hold strategy for the same instrument using a “daily” setting. I tested index ETF’s, leveraged ETF’s, commodities, and many individual stocks, most of which were small cap and microcap with strong fundamentals and higher beta’s . Of my tests, maybe 5% of the AIM tests beat a buy and hold strategy for the same instrument. I tried the various strategies, Default, Classic, Aggressive, Medium, with and without various filters. The results were mostly disappointing, to the point where I am not sure I would even want to do this strategy for long term investments. If the market stayed sideways, like it did in the 70’s when Lichello developed it, then AIM would probably be superior. But, the moment the test endpoint is significantly above the starting point, the AIM system seems to become inferior. If my conclusions are incorrect, please show me. I’m now looking at the Value Averaging system which appears to consistently outperform the market and even has extensive research to back it up. However, the returns on this system are only marginally higher than a buy and hold strategy – but it has consistency. I’d rather do AIM and get higher returns as you have suggested – 20% sounds very good to me. What am I doing wrong?