Replies to post #42569 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Undertrader

We have been in a long term bull market. Aim needs the up and down swings.

What decision making process do you use to lighten up your holdings before the next crash? How much profits do you take, when? Aim makes those decisions for you.

Not always
Toofuzzy

[OldAIMGuy]

Welcome Back UT, Re: REITs and your timing.....

I've been watching my REITs and REIT ETFs decline for about 2 months now. So far it's been a slide that hasn't generated any buys, more like the slide in 2015 - 2016.

Currently my VNQ position is at ~7% above its 52 Week Low, NRO is at around 20% above its low and WPC is at ~47% of its low. VNQ is coming into range for my AIM, but the other two are still a distance off.

Yields at current prices range from around 4% to around 6% it appears. There are some with higher yields such as NRO with an 8.5% yield. Yields are attractive here and the selling probably has to do with the change in direction of the FED. What's interesting is most of the increase in Treasury coupon yields has occurred at the Short end of durations.

Debt Paper              Current Yield        Yield 1 year ago 
 13 Week Treasury         1.455%/Yr             0.518%/Yr 
 26 Week Treasury         1.610%                0.600% 
 5 Year Treasury          2.270%                1.890% 
 10 Year Treasury         2.460%                2.380% 
 20 Year Treasury         2.630%                2.750%

So, it's a bit of a log jam at the longer end with very little change in the last 12 months.

Eventually the longer duration end of the interest rate scale will start to rise, but in the mean time it would appear the sell off in REITs is a bit over-done. REITs generally have far better yields (with good predictability) than government treasuries so shouldn't be under interest rate pressure here.

However, I've not looked into the ramifications of the new tax law and whether they have any effect on REITs. Anyone else taken a look at this area?

[Adam]

Hi Under, There are two reasons that AIM can underperform. The amount of cash can act as a drag especially now with the interest rate so low. I believe the amount of cash recommended by v wave is way too much to make AIM work. The 20% cash of Lichello's AIM Hi is probably the optimal amount to make AIM work in a broad based portfolio.

The other reason is if you AIM an individual stock that happens to go into a deep dive and does not recover and end up sinking a lot of cash and hurting the performance of the whole portfolio. The majority of the portfolio that one AIMs should be in broad index ETF's IMO.

[ls7550]

Hi UT. Good to see you're keeping well.

in 99% of the tests he ran, Buy and Hold beat AIM.

Use AIM HI settings (80/20) - with Vealie at 20%

Even standard 80/20 rebalanced yearly will do OK compared to all-stock

All stock tending to pull ahead during good times, falling back to the 80/20 periodically. With AIM scaling up to 100% stock after those pull-backs however the tendency is for AIM to compare to 100% stock or better over enough cycles.

Clive