Replies to post #38138 on A.I.M. Users Bulletin Board (AIMUSERS)

[Adam]

Hi Allen, ETF's are the safest way to go, and the industry sectors work well with AIM, the only problem is it will not give you international holdings. I'd also go with ETFs with zero commission. If you open a Vanguard account the ETFs are commission free, or in my case I have a Schwab account and they offer many commission free ETFs, though not industry sectors.

If you're not sure about the market you can divide the initial buys into say 3 or 4 spread out over a couple of months. That's what I tend to do.

[Toofuzzy]

Hi Allen

With 40,000 and 25% of that in cash, I would start with three of the funds you want to own and add more as you have funds.

Sounds like you decided to invest by STYLE. The s+p has 9 funds that invest in exactly those 9 segments shown on your chart with importantly no overlap of holdings. So you can own every stock in the S+P 500 with no overlap and the individual funds will have more volitility.

From the chart it looks like basic materials, energy, staples, and healthcare are the places to look but an easier way to choose which to start with is to print out a 2 year chart of each fund from yahoo and invest in the 3 or 4 that did the worst in the last year or two.

I dont know how old you are, but if you are anything over 30, you are way behind the retirement savings curve. You need to end up at 65 with 20 times what you need to live on minus what you will get from social security and pensions. While AIM is good, you dont want to EXPECT more than a 10% return. Some years will still be down.

Toofuzzy

[OldAIMGuy]

Hi Allen, Re: Cyclical graphic..................

In reference to that chart, one could say that Healthcare and Utilities peaked this summer and have already shown some early weakness. If that's the case, then the cyclical chart is well to the right on the X-axis.

With AIM, it will make sure you're accumulating in each cycle the appropriate business sector as it reaches near its bottom. Further, it will be showing build up of cash at each sector rises to its cyclical peak.

If you'd started your business sector AIMing in ETFs with 33% cash in March of 2009, and managed to buy the exact bottom of the market, you would now be sitting on a small mountain of cash. In theory you would have been better off starting in March of 2009 with zero cash.

Would you have lost money with all that surplus cash in 2009? No. Total return might have been dampened a bit, but no losses would have occurred. At that time 'all ships' were down and the phasing seen in the graphic really wasn't there. The first part of the recovery later in 2009 had 'all ships rising.' Only later did the phasing start to show up again.

The phase diagram is more important to those who do sector rotation than to AIMers. Each AIM engine set up for one major business sector will run at its own speed and be governed accordingly. If you choose "style" based funds that blend the sectors, then you lose this potential. AIM will manage style funds just fine, but there is a difference in activity because of the phase of the various components of a style based fund. They tend to own some of all the sectors so the differentiation is muted.

Hope this helps.

PS: I'm glad to see you are doing your homework. It's been a very long time since I originally posted that cyclical graphic! So, it appears you're doing some serious AIM history mining!