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Toofuzzy

05/23/05 1:09 PM

#15946 RE: WTMHouston #15945

Re LD-AIM The answer is 42 (Hitchhiker's Guide to the galaxy)

Seriously:

To address some of the issues brought up you first have to decide if you are going to be an investor or a trader.

Personally I do not think much of the traded mindset. You are being a gambler and are just using the stock market instead of a casino.

Yes NO - Down or LD - AIM can be used with STOP-LOSS and LIMIT ORDERS while keeping most of your assets in CASH.


If you are going to be an investor then you want to actually own stock (or in my case ETFs to reduce risk or mutual funds. Using LD-AIM increases the order size for small accounts allowing further diversification.

If you are going to be an investor you want to stay away from the penny stocks and buy stock in companies that are well established that you actually want to own. You may end up owning a ALOT of it with AIM. Better yet you might want to concider indexes (ETFs or mutual funds)

In first becoming an investor you may want to decide on a MACRO level what you want to own. Instead of thinking about companies think about ASSET CLASSES (large, small, growth, value, forien, bond, cash, etc)or INDUSTRIES. This fits well with ETFs or MUTUAL FUNDS.

In my thought process I switched some of my accounts to LD-AIM because I thought "Why own shares that I will watch go up and down in price but never sell IF THEY DO NOT PAY A DIVIDEND. In other words WHY HOLD SHARES THAT WILL NEVER GENERATE ANY INCOME.

So in my case, with established AIM accounts I sold the share I THOUGHT I would not need and kept the PORTFOLIO CONTROL the same. (I am now sold out or mostly sold out of ENERGY, REITs, and FORIEN sector ETFs)

You can use LIMIT and STOP LOSS orders with LD-AIM but you end up giving up some of the profits. The strategy might work better in a market that is trending in one direction or the other but if you could recognize such trends early enough you would not need AIM.

We are in a see-saw market now. Just when you decide to change AIM paramerters by narrowing SAFE settings or other changes the market will change.

My Ultimate advice is to pick conservative AIM settings that will work with average market conditions and then stick with them. If you try for the maximum returns you risk the maximum loss. Instead try to achieve the return that will get you to the goal you NEED.

Remember you want to SELL to the GREEDY not be the GREEDY.

Not always,
Toofuzzy