Replies to post #6769 on A.I.M. Users Bulletin Board (AIMUSERS)

[Rien]

Hi Grabber-Steve

Certainly it is clear that if one were to start a new program using LD-AIM; and then let standard AIM manage it long term (in Warren Time?), the difference in total $ return one method versus another would diminish. If this is true, then the $ saved on that initial purchase could also be used to start another program. Therfore you would be more diversified lowering your risk probability to some degree

I highlighted the part with which I have a problem. However in order to properly formulate an answer I would need to know just how you would propose to start.
Example: available money $10,000
AIM calls for $5.000 initial investment.
LD-AIM lets you get by with, say, $1,500
But BOTH systems would request you to have $5,000 available for new purchases!.
So you only have $3,500 available for another LD-AIM account.

Basically you would have to ask yourself if you really want that money at risk or not.

If you were to put that $3,500 in a money market account, then I would reason that you LOWER your risk while INCREASING your return IF the AIM account is using stocks that do not pay a dividend. (Please note that ON AVERAGE the higher returns in the stock market comes mainly from dividend reinvestment)



Best,
Rien.