Replies to post #37950 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

You don't have it wrong Allen - its simply :

Start with some stock and some cash (perhaps a 80-20 split of each for instance)
Initially set Portfolio Control (PC) = stock value (SV)
Each month you check your AIM
If your PC is larger than SV, then AIM is considering buying T = PC - SV - 0.1 x SV
If your SV is larger than PC, then AIM is considering selling T = SV - PC - 0.1 x SV
Only actually trade if T exceeds some minimum capital amount, perhaps 10% of SV
Each time you BUY additional shares, increase PC by 0.5 x T (PC remains the same after each sell).
Don't trade too often, review or trade at most once each month.

[OldAIMGuy]

Good morning Allen, Re: Market Order...................

The easiest way to remember this rule is that SAFE is always reducing the size of the Buy/Sell Advice to give us the Market Order.

So, in this example, the author added the two together making a larger market order and therefore is wrong.

This doesn't mean it might not work for a small market dip, but would accelerate the cash burn to a very rapid pace in an extended downturn.

Best regards,