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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: Dataminer1 who wrote (7882)	7/6/1999 8:13:00 AM
From: OldAIMGuy	of 18928

Hi Bill, I also had some correspondence on this same subject back about a year ago with the advent of Profunds and also discussion on the Rydex funds. The problem with trying to balance a bull and bear fund comes with the concept of nearly 18 years of straight bull market! As with any hedging strategy, part of the portfolio wins while part loses. I did better (on paper) when I tried using AIM to get some balance with US and foreign currencies. The idea here is to have a currency shift in a long pendulum cycle. One starts by loading up on the under-valued currency. Using AIM's advice, one sells the initial currency (the "equity") as it strengthens and transfers the value to the US currency. Then when the US currency strengthens against the foreign currency, with AIM's advice, we repurchase the foreign money with our "strong" US dollars. I had planned on using short term bonds on both sides as the "equity" and "cash" for the balancing act. In this way, we'd get some yield as well as the valuation shift as we wait out the relatively long currency cycles. If you take a look at the Yen VS Dollar for about a decade, you will see where I was heading with this study. Best regards, Tom

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