Replies to post #32934 on A.I.M. Users Bulletin Board (AIMUSERS)

[AIMster]

Is FIFO, SISO, TITO. . . . . or FILO, SISLO, TITLO. . .NINLO . .etc. actually advantageous? What is the possible benefit of matching the quantity of a Sell to a quantity that was bought in a particular order?

The primary use of matching individual buy lots with sale lots, and in which order FIFO or LIFO are mainly to due with recognition of gains or losses, particularly in a non-tax sheltered account. As AIM advocates buying at lower prices, if we match a later sale to the first lot, we may actually have a loss, but if we match it to the last we should likely have a gain. Outside of tax considerations, it shouldn't matter and your idea of a common pool makes perfect sense. If you live in a place where capital gains aren't taxed (tell me where it is, please!) this becomes a non-issue!

Best,

AIMster

[The Grabber]

Re: FIFO or LIFO, etc

Hi Conrad.

Here in the US we are allowed to treat owned share 'consumption' (via Selling) by either method. So for tax purposes, it matters.

Within AIM performance measurement, we here have traditionally reported gains due to selling using LIFO, as that may best represent what AIM does.

Some time ago (years) I figured this out within Lichello's 10, 8, 6, 5, 4 series over the 6 years. Using LIFO is more agreeable.

How one calculates or reports those gains has no impact on AIM controls (PC), pricing or amounts.

In the long run, it doesn't matter once a program is completed (all shares consumed) as the dollars in - dollars out = profit.