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Replies to #119 on AIM RE-bal

OldAIMGuy

02/16/04 4:37 PM

#120 RE: jibes #119

Hi Jibes, I've not had any time to try any testing, but a thought occurred to me relative to rebalancing of a variety of AIM accounts. Since AIM's already doing some internal rebalancing with it's own activity, maybe it would make sense to just rebalance the Cash Reserves once a year.

By redistributing the cash we'd be taking cash profits from one investment and funding a weaker one when its reserves were low.

Much would depend upon the class of investments one was using. For instance, Exchange Traded Funds might offer a very nice opportunity for such a program. Since the "single stock risk" is much diminished with sector funds, one could possibly let the "tech" sector continue buying with cash redistributed from, say "energy" sector.

I have a feeling this would make for rather spectacular results coming out of a deep bear market. Those funds that didn't completely exhause their reserves would still have smaller "anchors" to drag along. Those who used rebalanced cash would certainly have made buys at a much deeper discount than it would have otherwise been able.

Just a thought....

TV