Replies to post #13415 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi EBAYaim

I have a few questions for you.

1)How old are you?

2)Is this the only savings and investments you have or will have?

3)Is this just a small part of a much larger portfolio?

Some thoughts:

It is my personal feeling that Tom's Idiot Wave is a good starting investment ratio. Another way to go would be 50-50 when P/E ratios are high and everyone is gun ho on stocks (think 1999), 33 1/3 - 66 1/3 when the market is like it is is now, and 20-80 when the world seems like it is comming to an end (think 2001 - 2002)

In order to have a min trade of $500 and starting AIM with a 33-66% split you need to start with AT LEAST $15,000 (unless you start with LOW -DOWN AIM then figure 1/3 the amount)

ANY company can go bankrupt. Look at Enron and Worldcom, both big sucessfull companies.

If you don't already have $100,000 you can not diversify enough with individual stocks and use AIM ($15,000 min per stock). You should use a low cost diversified index mutual fund or an Exchange Traded Fund.


If you are relatively young and will be saving a significant amount of money each year you could diversify by starting a new AIM account every year or two. Even so I would go the mutual fund or ETF route.

Just my personal thoughts
Toofuzzy

[Rien]

As we all know, MSFT has risen tremendously over the past 20 years and I wonder if it would have been a good candidate for a.i.m, as I am of the view that EBAY could have similar longterm growth qualities.

EBAY has a market cap of $56B, MSFT of $300B.
So while EBAY may do quite well, it will IMHO not have as good a track record going forward as MSFT did over the last 20 years. (Barring hyperinflation)

Best,
Rien.

PS: In a stock like MSFT hindsight-LTBH would probably have delivered far superior returns to AIM.