Replies to post #28604 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi i5001, Re: Ultra from Am. Century vs the "other" Ultra funds.............

American Century's Ultra Fund is a well diversified, low cost, no load mutual fund run by a committee. It's not an "index fund" or a leveraged index fund. The ones to which Toof if referring are the latter.

I owned Am. Century Ultra from around 1990 to around 2002. It worked well enough and provided me with reasonable gains. After 2000 it also, had I been collecting dividends in CASH, provided me with an opportunity to use AIM's buy side to accumulate more shares. Unfortunately, I'd always let Am. Century do the reinvesting of dividends. That left me short of cash when the account needed it desperately.

After Sept, 2002 I redeployed the $$$ into separate business sector ETFs so that AIM could work each component rather than the diversified blend of Ultra Fund. That worked better.

Much is going to depend upon the total amount with which you can invest. If it's $10,000, then a single diversified mutual fund is probably fine. If it's $100,000 in value, then you might want to look at dividing it up in a similar fashion to my IRA ( http://www.aim-users.com/etfunds.htm ). If it's at $900,000, then you can subdivide it even further by using business sector ETFs for at least the U.S. portion.

If the individual AIM accounts are too small, then your minimum order size will make the Hold Zone too large. So, think of Mr. Lichello's original $10,000 as the minimum "critical mass" for making an account work. One can start an account with smaller amounts and it will work, but the trading will be minimal and therefore AIM's added benefit will be small.

Best regards, Tom

[Toofuzzy]

Hi Investor5001

To add to Tom's post:


1) If the min amount of stock is $10,000 then a min trades size (5%) is $500. Your profit on the first sale is only $75. Then add the cash reserve you want to start with (20% to 50%). This past spring I would have used 50%, at the present time 20% is probably enough. So at the present time you could start with $12,000 / account or fund.

2)Yes the Vwave is "advising" to go on 35% margin. Just because someone says to jump off a bridge that doesn't mean you have to listen >>>grin<< So I would use the V-wave to let you know that you can start with less than 50% cash at the present time, then let AIM tell you how much cash to hold in each account.

What was that line from the "Pirates of the Caribbean " About the pirates code....
"They are really only guidelines"

3) As Tom wrote depending on your assets and how quickly you can add more you can either diversify immediately into a few funds or you could buy one of the funds and add a new one every year or so as you have more savings to invest. I-shares has a good compliment of funds that cover MOST asset classes.

Toofuzzy