Replies to post #39457 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Ray,
At 65, I'm still a few years away from starting to draw on my retirement account. I'm using the same portfolio for my wife's IRA and some others. I don't see why I'd switch to a different structure after retirement unless I have to dip deeper into it than the min. annual distribution.

As I run it, I keep the cash reserves separate for each component in the software I run (Newport Programs - an extinct, but still around software). I do allow for Peter to borrow from Paul on specific occasions and circumstances but that's been pretty rare in the last 5 years. Currently emerging markets is in debt to the rest of the portfolio, for instance. The good news is that just this AM I sold 5% of the emerging markets ETF (DEM) after 6 consecutive buys without a sell since the start of 2012. So, with luck that component will repay the rest if the upward trend strengthens.

Here's returns for the last few years:

Year         Gain/loss     Thoughts 
 2007         +1.0%        income components out of favor 
 2008        -28.9%        everything out of favor except gold 
 2009        +38.6%        Maalox finally starting to work! 
 2010        +14.7%        continued strength in most segments 
 2011         -1.6%        many segments hit by poor market conditions 
 2012         +8.6%        post-consolidation gains 
 2013         +7.5%        reasonable performance even with 30% cash 
 2014         +3.9%        ex-US components under pressure 
 2015 Q1      +2.2%        US and ex-US both doing reasonably well

The portfolio is heavy in cash at around 30% and has been for quite some time. That has hurt performance in recent good years and helped in bad years. The income components and REITs were hurt in 2013 but recovered nicely in 2014. 2014 was awful for emerging markets (four of the buys done in that year) along with Intl. Small Value, Intl Mid Value and Intl Large Value. So, while some areas were off, others were up. "Expected Returns?" Well, your crystal ball and mine probably aren't clear enough to see that answer!

Mr. L's AIM-High shifts the Equity/Cash ratio and also requests a 10% minimum trade size. I prefer to use a floating maximum and continuing cash reserve for most of the components to a fixed one. In this portfolio I use 5% minimum trade size for most equity components and 10% minimum on some of the income segments. Is that the Retirement AIM to which you refer?