Replies to post #36845 on A.I.M. Users Bulletin Board (AIMUSERS)

[The Grabber]

Hi Mike:

I notice that some of the reports to this BB show cash levels down in the mid-20s. I appreciate the purpose of the V Wave is to establish starting point cash levels, but even so does this suggest some people are operating at higher than recommended risk levels?

Probably so for me.

I'm one of those that typically runs cash in the 20's.
It is a common cash reserve used for 17 individual stock holdings and one ETF. I've had as many as 22 holdings, but average at 20.
Over the 10+ years of running LD-AIM exclusively I've been out of cash 8 times at the end of any month; so 6-7% of the time I guess.
Average cash % over those 123 months has been 17.

I'm not even sure what the 'recommended' cash or risk level is for a total LD-AIM portfolio with some programs running for most of the 10 years.
And I'm not sure I need to know.

[Toofuzzy]

Hi Daisy

>>>>Incidentally, I notice that some of the reports to this BB show cash levels down in the mid-20s. I appreciate the purpose of the V Wave is to establish starting point cash levels, but even so does this suggest some people are operating at higher than recommended risk levels? <<<<


My own feeling is if you started in an average market with 50% cash, you should be building even MORE than that as the market has gone up. So while if you started investing in 2003 or 2008 you could have started with less cash you should be building up a LOT more now and certainly more than 20%

While the V-wave is SUPPOSED to be just a guide for starting it wouldn't be out of line for your account to track the individual stock V-wave level, even for funds.

Toofuzzy