A.I.M. "In Depth" Q&A

[Toofuzzy]

If I am correct 200 is less than 300 dollars.

1) if that is all you have it should be in a savings account for an emergency.

2) You should make a commitment to yourself to put aside 30% of your net income. In the United States I would say 30% of your gross income but I assume your taxes are about 50% of your income.

10% should go to an emergency fund (bank account) It will take you five years to save up enough to live on for six months

10% should be set asside for retirement (this assumes you are in your early 20's ( You need to set asside more if you are older) This will go in to stocks and be AIMed eventually.

10% will be set aside to do the things you would like to do annually like a vacation or buy some big ticket item.

AIM has you trade 5% of your holdings. You do not want those trades to be too small. It just isn't worth it. So you would want to start AIM with about 6500 british pounds in stock and an equal amount in cash. (About $10,000 US dollars each) So your trades will be a minimum of 325.

You also want to stay away from individual stocks. You are buying as a security goes down and stocks can go to zero. Stay with funds. In the US we have what is known as Exchange Traded Funds. They trade like stocks thruout the day and you know what price you are getting unlike mutual funds which price at the end of the day. (though mutual funds are better than individual stocks)

Deside what you wnat to own for the rest of your life. That might be Large Value, Small Value, Foreign, Reit (real estate), and a bond fund. As you have enough funds you can start a new AIM account in each fund one at a time every year or two. Buy the one that has done the worst in the prior year that you don't yet own.

PS: Yes I own and AIM individual stocks and I am gradually getting out of them and simplifying my investments. I have had more than one go bankrupt.

Toofuzzy