Replies to post #29491 on A.I.M. Users Bulletin Board (AIMUSERS)

[Toofuzzy]

Hi Cindy

If OIL is based on options or futures you will be better over the long term AIMing IYE for reasons that are hard for me to explain.

>>>>Also I remain very excited about AIM but I have had some bumps in choosing ETF's. I am planning to end up holding Global Telecom IXP, Utilities IDU, Tech IYW, IBB, Real Estate IYR, Steel SLX and Commodities GSG. I rethought XLF and am replacing it with KRE. Any suggestions?<<<<<

Telecom and tech are probably very similar. Steel and commodities are also similar. Take a look at ICF as compared to IYR (there is also a third one) and decide which feels better to you.

When I started out I used IBB,IYC,IYE, ICF, IYG (but switched to KRE last year),IYH (not enough volitility), IYJ, IYM, IYW, and EFA.

You can certainly start with just a few funds add more funds as you have more money (I feel a minimum is $15,000 / fund, $10,000 stock and $5,000 cash)

and as I wrote in the past you can just use a
Large value
Small value
Forien
REIT

Toofuzzy

[AIMster]

A few questions. I started buying OIL at $21 and below $40 a barrel. I thought I understood contango but I clearly didn't know how it would play out. Now oil is @ $40 a barrel and OIL is below 17. If the price of oil continues to go up, can I expect OIL to follow? And is OIL good to hold here in your opinion? I plan to AIM sector funds so should I trade OIL for IYE and own the companies instead? Surely would appreciate your feedback.

Hi, Cindy,



Clearly there is some correlation between the price of crude and this OIL play. You should note that this is an ETN rather than an ETF which is a slightly different beastie than you might think it is. See: http://stockweb.blogspot.com/2008/05/difference-between-etf-and-etn.html

Also I remain very excited about AIM but I have had some bumps in choosing ETF's. I am planning to end up holding Global Telecom IXP, Utilities IDU, Tech IYW, IBB, Real Estate IYR, Steel SLX and Commodities GSG. I rethought XLF and am replacing it with KRE. Any suggestions?

Given the current state of the market, I'd phase in to the various ETF's rather than starting out buying the whole lot at once. Keeping cash reserve is an important thing to do right now. We may be near the bottom. On the other hand, Lichello noted that today's floor is tomorrow's ceiling. One needs to balance the excitement with patience. A good analogy is fishing - let the market come to you rather than chase after it.

To answer your question on what do do near a bottom, My savings and dividends afford a stream of cash that I use to buy on the bottom using a fixed ratio of cash to amount invested. That way I don't run out of cash and having more come in, using a ratio relationship keeps me from getting too cash heavy either.The one group of richest dividend paying funds has a near obscene 34.98% dividend yield right now. I'll believe it when I see the money. Given the pittance they're paying on the cash right now if inflation kicks in it's not even holding value. Or barely so.

Some more ideas for you. Keep the questions coming.

Best,

AIMster

[karw]

Hey Cindy,

I have the same question as you have : which ETF's to use ?

I use ETF's in Europe, mainly iShares. I prefer the Dublin based ishares or ishares II because they pay dividends per quarter, while the DE type for example typically pay per year. The same applies to other ETF families in Europe. They have to discover first that they exist for their customers who like frequent payouts.

Because i notice a run in the dollar I also like US ETF's, hoping for euro/dollar benefits on top of Aiming. I have looked at different suppliers and noticed:

- ishares, I like the international sector ETF's. Disadvantage is the cost of 0.48% and half-year dividend payments.

- Vanguard, I like the costs( for example VNQ 0.10%). They dont have global sector funds which is a minus. Only domestic sector funds. I like VGK with its high dividend, better than i can buy in Europe itself.

- Powershares, I like the diversity of what you can buy. It is a nice product set with monthly and quarterly dividend payments although their costs are a bit high. Their indices are not passive but active and looking at their graphs this gives more amplitude for example over the 2003-2008 period. How this method performs from 2008-2009-2010 is unclear to me at this moment. I read about traders who know the Invesco algorithms who anticipate on the portfolio realignments which could undermine the dynamic advantage.

- CEFs - the Nuveen list is very nice and you can search using ETFs, CEFs. I bought a bit here and there, looking at high dividend payments, but have no thoughts about what i see.

- Wisdomtree, I like the Siegel algorithm. Wisdomtree is paying dividends now quarterly. Their costs are at the higher end, but a problem is the ability to trade. Not all trades fill. They supply international sectorfunds.

- Calamos and ACG. You can read a lot on this forum because a lot of people use these for income. CHY is nice to AIM currently.

This is roughly what I consider at this moment. I must say that I get the best feelings using the iShares Global Sector funds. They feel like hard currency to me. It could be because I am based in Europe, but I believe in the Global economy and don't want to be overweight in a particular area.

I also still Aim Stocks, although I liquidated some machines at the top.

I would also like to read other people's ideas/thoughts about ETF's and how they are getting used.

Kind Regards, Karw