Hi all
Pleasantly surprised to see that someone read my post re: A.I.M adjustments.
I use A.I.M. for upro, tqqq, cure, and soxl in my growth portfolio. I also use it for all my income producing etfs, reits and cefs though these are very sluggish.
I have used A.I.M since the first book came out, and before that used (and still do) synchrovest with, in my opinion, great success. Whenever my "slush fund" dividends equal 1,000 I use them to synchrovest into tqqq to build up the balance continually. I.e. never selling as I would with A.I.M. I've also tweaked synchrovest so that my minimum investment is always at least .8cash currently available to invest. This has been very productive.
Re: A.I.M. I re-set after each sale just as if I was any new investor starting out with A.I.M. This lets me ride a bull market higher by selling less as the market increases and demanding higher prices to trigger a sell. It does depend on the stock vehicle that one is using. Mcd would provide different activity than sbux, or dpz. This is why I love using the triple leveraged large indexes as I've indicated above. This also keeps the emotion and subjective judgment of stock picking to a minimum. As to buys, I'm also treated as if I were a brand new investor entering at the price of the latest sell.
I've found that trying to "think" if the market is headed up or down is the opposite of what Mr. Lichello was trying to achieve. Also I've found that by raising the buy target as the market rises without raising investment control, I run the risk of buying at some later amount where I should previously have sold.
As to the excess cash above 1/3 of the portfolio control, I use it to dollar cost average into yyy, ffc, or my favorite, though thinly traded, dvyl. I dollar cost average instead of synchrovest because these just don't move that much and I want to maximize my dividend income.
I have given up on stock picking in favor of indexes. At one time I had over 60 stocks in my portfolio, all under A.I.M. I've had some large losses, all from individual stocks, never from and index. An index provides safety in numbers, but also mediocrity. Spy returned about 20% last year which is good. It averages though about 9.5% per year over the last 60 years or so. OK, but hardly Warren Buffett numbers. That's where leveraged indexing comes in. The safety from individual black swans plus the movement and frequency of trades and swings that A.I.M thrives on.
The leveraged indexes mentioned above have been great invmt vehicles for my programs. They provide more activity than most stocks (quality stocks anyway).
I've found that I don't need more than three consecutive buys in bear markets to achieve what A.I.M.'s goal is to "buy into a declining market", not to time the exact bottom. After three buys I'm pretty certain that my purchases have significantly lowered my average cost/share. Keeping more cash on hand just acts as if I were shorting the market, creating a drag on overall performance.
Best to all, Doug K.
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