Replies to post #10752 on A.I.M. Users Bulletin Board (AIMUSERS)

[Adam]

Nickk,

I'm not sure what % you set aside as cash--if it's 50% it means you expect you the stock to go up/down with a 50% certainty, which is very pessimistic and will give poor results when the stock rallies before you have a chance to use your cash reserve. On the other hand if you have some income you don't actually have to have the 50% cash sitting there.

[OldAIMGuy]

Hi Nick, If the market's kind to you, you won't need to lower your cash levels. Instead, they may be reduced in percent of total as the Equity side increases in value.

Each of us has to establish a comfort level and then set up our portfolio to mirror it. If we achieve our goals, then we've succeeded. If we set arbitrary goals of some market index increase, then we can set ourselves up for disappointment. That can lead us to extend risk beyond our original comfort levels.

Best regards, Tom