Hi Bob, Looks like you had pretty good AIM in 2000! Congratulations. I think you deserve an award for your efforts.
I'll stick with stocks a lot longer than most folks around here, but then I've been AIMing for longer, too. Sometimes the stock overstays it's welcome, but I kick some out when the start to smell.
With LU recently, I decided that even if there's good news along the way, it's never going to grow as fast as the smaller and more dynamic ADCT that I also own. So, it was then on to analyze which stock had better fundamentals. Again, ADCT turned out to be about the same value as LU, but with more potential.
The decision was reached, the shares sold and the new shares purchased. Now a couple of weeks later, it doesn't feel as good as LU's been holding and ADCT got bashed today! Oh well, the market over-reacts more often than now. I think a year from now I'll be glad I made the switch.
My UOPIX has been a challenge for me and I think a bigger one for others here on the BB. Since I had a year's worth of profits on which to work it was one where I had to do an UN-AIM like thing and cut the Portfolio Control to get it back to where it looks like I'll get some AIM trades again. To do so, I first figured my current average cost per share. That would be a departure point for any decision I would make. Next, I looked at what my last major AIM buy was. A second step in my thought process was to get back on track with a positive LIFO trade if possible.
So, with those things in mind, I dropped the Portfolio Control from around 60,000 to around 40,000 and kick started the account again. This dropped the trade range from Next Buy - $47.63 and Next Sell - $61.85 to Next Buy at $31.72 and Next Sell - $41.22. Now, I won't be selling right away, but when I do, it will be both LIFO and AVERAGE COST profitable. I have this "luxury" because the average cost is only about $30/share.
Now, for those of you with a very high average cost, you may need to take more drastic action. I truly have taken stocks with tremendous losses and traded them back to profitability with AIM. However, it takes time and patience to nurture a wounded soldier.
For my alumni account, I plan on using the dividends from the ACG bond fund that's part of the same account to continue buying as long as UOPIX stays below AIM's desired buy point. Also, ACG's now nearing an AIM sell of its own. The cash from that sale will also go to help UOPIX along as soon as such money comes available.
Further, I've been considering how to handle UOPIX for the long term. Having a 2X NDX fund during the Bull Phase is lots of fun! However, it's not turned out to be as much fun on the down side. My thoughts right now are to use my other investment tool, the Idiot Wave, to trigger a switch from UOPIX to QQQ, the 1X index. For those of you with your accounts direct with Profunds or Rydex, they also have 1X NDX funds to which you can switch.
My thoughts are to liquidate the UOPIX holding when the Idiot Wave heads into High Risk territory. I would then wait and not buy QQQ until the IW had settled back from High Risk. I would then buy QQQ in equal dollars to what I'd sold of UOPIX. I would then AIM it if the price fell or rose at that point.
Now, any time the Idiot Wave headed to Low Risk territory, I'd then again make another switch. My thought is to quickly switch from QQQ to UOPIX at that point and see how the ride back up goes.
This is obviously VERY experimental at this point. I'm not recommending it to any of you, as it's unproven. It's taken me a very long time to have enough faith in the Idiot Wave to use it as I already do. It's still a big leap of faith to use it for this new idea. Please understand that this isn't a final plan as of yet, but are the outline of a plan.
Had we done this sort of thing since I started this account back in 1998, I would have participated in much of the upside at 2X the NDX and some of it at 1X. However, I'd only have participated in the downside at 1X which would have saved the account a tremendous beating.
I'll have more on this later as I clarify the plan.
Best regards, Tom |
