Replies to post #38191 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi SF
You cant really invest at the wrong time with AIM.(at least with funds)

Either start with 50-50 or use the v wave and start with 62% cash.

You can never really tell how big this pullback will be and some industries like presious metals have already pulled back quite a bit.

If you are hesitant, start AIMing the industries you want to own with no cash. If you are right, you will be right, buying as it goes lower. If you are wrong, well you were waiting anyway.

Besides you only have funds for 3 of the 809 sectors at the present time. Pick the 3 that have pulled back the most already.

Toofuzzy

[OldAIMGuy]

Hi Allen, Re: Sector ETF and starting AIM when things are out of favor.........

Here's a really handy screen from StockCharts:
http://stockcharts.com/freecharts/perf.php?[SECT]

It shows the major business sectors all in one interactive chart. Note that you can change the X-axis to be the time frame in which you are interested. By clicking on the S&P 500 (first box at top) and making it gray, you can see the various sectors relative to the S&P. Right now if you were to set it for different time frames, this is what you'd find:

 Sectors relative to the S&P500 Index................ 
 Sector        65 Days        Year To Date        Year over Year 
 Staples        flat               flat                 down 
 Cyclicals       up                down                 down 
 Energy         down               down                 down 
 Utilities      down                up                  flat 
 Industrials    down               down                 flat 
 Financials      up                flat                 flat 
 Info Tech       up                 up                   up 
 Healthcare      up                 up                   up 
 Materials      flat                up                   up

It shows Cyclicals, Staples and Energy being underperformers compared to the S&P500. This is only Relative Performance in this view. Of course you can expand the X-axis further to see longer term trends for all the sectors, but it can get a bit confusing.

If you unclick the S&P button at the top, you'll see that all sectors are up year over year (253 days on the X-axis), so that chart above can be deceiving. While Cyclicals, Energy adn Staples are all underperforming the S&P 500 Index, they are all up nicely from a year ago.

 Sectors relative to their price one year ago........... 
 Sector        65 Days        Year To Date        Year over Year 
 Staples         up                 up                   up 
 Cyclicals       up                 up                   up 
 Energy         down                up                   up 
 Utilities      down                up                   up 
 Industrials    down                up                   up 
 Financials      up                 up                   up 
 Info Tech       up                 up                   up 
 Healthcare      up                 up                   up 
 Materials       up                 up                   up

Traditional sector rebalancing can suffer from such deception. Shifting back to equal weight at this point would have someone buying more shares of Energy even though it is up for the last 12 months! The nice thing about AIM is that it won't let you do such things. AIM will only buy more Energy under circumstances where Energy is down relative to its starting point or down from its most recent selling point.

Maybe this will be of some value going forward as to selecting what might be the best candidate at the time when you're ready to invest.