Replies to post #21 on AIM RE-bal

[2mc]

Ok, is there a "jibe" and a "jibes?" That's too confusing for me. :-)

I rebalance weekly and "AIM" monthly. And, if I understood your question correctly, then I think you correctly stated it.

But, in reality for me (because I am with folioFN) I don't have to set exact prices, I can just tell folioFN: (when rebalancing only) "Reset my portfolio to the original percentages" and (when rebalancing and 'AIMing') "Here's what the new Stock Balance should be and reset to original percentages."

It's really easy at folioFN. Since my account is an IRA and I don't have any commissions (to speak of) and I can buy fractional shares, I don't worry about any minimums.

Matt

[jibes]

Am I correct in thinking that your re-bal calculation and your aim calculation go hand in hand. In other words you do both together. I thought I read a post where someone was going to do the re-bal calculation weekly and aim monthly(??).

Yes. the Re-Bal is done at the same time as you do AIM. The two do go hand in hand. Some months AIM says no buy or no sell. You will still do the Re-Balance and even that might say take no action. More than likely though it will take some action. I recomend doing it once a month.

However there are times when a stock in the port will fall a great deal (or rise). Lets say 15% in one or a couple of days during the middle of the month. I will then do a "special" It's just too good to pass up. What I do is do the AIM Re-Bal at that time instead of waiting till the end of the month. Of course this has it's dangers because how low is low and how high is high? The stock may still go down or up farther. Common sense should prevail.

Also, Let's say you had a portfolio of 4 stocks. When you do your re-bal calculation(along with AIM), you should get an exact buy or sell amt for each stock. So you don't have to decide which stock in your portfolio to apply your buy or sell to (which isn't the case when using AIM alone), re-bal tells you how much of each to buy or sell. Is that correct?

The formula shown on my website shows that each stock is compared to the "IDEAL VALUE." Any of the stocks will fall above or below this number and the diference is the amount you buy or sell. I ignore any order under $100 for the time being. I think is should be a min percentage though rather than a fixed amount.

Jibes