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

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To: matvest who wrote (14088)	12/24/2000 5:51:42 PM
From: aptus	Read Replies (1) of 18928

Hello Larry, If you're thinking about stocks, then RL says you can simply take the dividends out of the AIM account with no repercussions to AIM (p. 206 in the 3rd revised edition). He further suggests that you don't reinvest dividends (same page). However he suggests the latter because of the difficulty in record keeping (i.e. buying fractional shares many times). However with computer software and other advances in the trading process, that is no longer a concern. Therefore since RL says that a dividend can be removed with no adverse effects, you should treat any dividends as new cash deposited into the account. That being the case, you should put half (actually the amount of your initial cash setting, i.e. 33%, 50% or whatever) the money into cash reserve and put the remainder into stock. Then adjust the Portfolio Control by the amount you invested in stock. If you're looking at mutual fund dividends handled by the mutual fund company, then that may be a different scenario. See pages 213 and 214 of the third revised edition. regards, Mark.

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