Hi Steve, Re: Performance.....
The AIM algorithm usually underperforms in rising markets. There's two reasons for that. One is that AIM requires a cash reserve and it will never grow as fast as a rising market. The other is that we're continuously selling off shares in a rising market and building a larger cash reserve in the process. This makes for an even heavier anchor.
This portfolio probably also underperforms because it's heavily weighted with bonds. Those give us income which the fund needs to distribute periodically. (yes, these are two separate distributions and are carried on the books shown each month.) So, UOPIX has rarely represented a very large part of the total portfolio. It requires a very low risk profile before we commit to it in a heavy way. Only back in 2001 did we let the UOPIX rise to 100% briefly. It doesn't show on the graph because it lasted less than a month total.
In this case, we underperformed as you suggest since late in 2002, but in terms of racing, we were already a half a lap ahead at that point. So, we're in a dead heat at this point. Both the Nasdaq and the account are up about 100% from some point on the graph.
Our goal has been to generate current income for distributions while building the portfolio in the long term. We've about doubled the account's value since Sept. 2001, but much of that gain was that we side stepped much of a lousy year in 2002. On average we're doing okay. This last 12 months has been a challenge, however. No volatility to trade with AIM and bond funds going nowhere.
We'll collect dividends off the bond fund until we see risk subside. Then we'll add the growth component back.
Thanks for the observations and questions.
I'll check back in when we're getting another Low Risk or at least moderate risk signal.
Best regards, Tom
Market Data 
Markets 
AI
