Replies to post #28854 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Hi investor5001

From the fourth edition of Mr L's book, page 211

"..when you have to withdraw funds from your AIM program for emergency. If you need $1000, simply take $500 from your CASH RESERVE and sell $500 worth of STOCK. You've got your $1000. Now reduce your PORTFOLIO CONTROL by $500 and you're all set."

[OldAIMGuy]

Hi i-5001, Yes, you're on the right path as Clive points out. In doing it that way, there's no change to the Equity/Cash ratio when the portfolio reduction is made.

If you were at 67/33 and wanted to retain the same Equity/Cash ratio you could subtract in the same ratio. In either case, you would reduce the Portfolio Control exactly by the amount that is taken from the Equity side.

Moving in the other direction, if Aunt Tilly dies and leaves you $10,000 and you want to add it to the existing investment, you'd ratio it the same as the current E/C if you wanted to keep proportions the same. PC would increase by the exact amount you add to the Equity side.

Best regards, Tom