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

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To: OldAIMGuy who started this subject	11/3/2000 7:06:29 PM
From: OldAIMGuy	Read Replies (2) of 18928

This letter is from a new interested party. I'd appreciate any and all responses that might be helpful.......... I recently retired and am looking at AIM as an investing technique. A couple of questions - 1. re risk - much is said about AIM being low risk, but I have not seen any hard facts (I know risk can be quantified using Std Dev or Max. Draw Down - since much of the AIM software is spreadsheet based, std dev analysis should be easy). Your interesting charts of TWCUX with AIM and AIM with various tweaks suggest that risk goes up with reward - but the actual #s would be interesting. 2.cash vs bonds - there are 3 broad investment classes - stocks bonds and cash. AIM is based on the idea of varying the ratio between stocks and cash. It ocurred to me to wonder what the results would be if one used AIM to vary the ratio between stocks and bonds ? (I seem to recall that there was historically an inverse relationship between stock prices and bond prices - suggesting that this might be an interesting approach to consider). 3. I'm also curious as to how many trades/yr are typical in AIM - since some brokerages have penalties for "excessive" trading. Is this a problem ? (I just joined Silicon Investor - tried to post this to the AIM board, only to find out you need to be a Premium member to post ) FWIW - I'm a patent atty and I've been using Fasttrack (and Ftools) for the last 5 years to select funds, having recently taken early retirement, risk has suddenly become more real to me. Thanks CS -------------------------------- Dear CS, Welcome to the AIM BB. In regard to your Question #2, Mr. Lichello talks about balancing AIM's Equity with ST Govt. bonds or bond funds in the last chapter of his book. He feels that most of the time we'd be better off with the higher yield than with money market funds for the majority of the cash we keep in reserve. Several of us have used this approach successfully. Sometimes we've had the problem of our favorite stocks AND our ST bond funds being off their best prices simultaneously. Then it's a matter of taking a hit on the bond fund (small) to buy into a deeply discounted stock or equity mutual fund. The total return usually makes up for the tiny loss incurred in selling the bond fund. I hope this gets the ball rolling for you. Thanks for the questions. Best regards, Tom

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