Q......
Dear Tom,
I have been aware of aim for over 15 years. For better or worse, I have not used it. I managed to latch on to the sacred stocks of the last bull market for 3 good years making wonderful profits. I even managed to sell them at or near their peaks.
csco,intc,orcl,emc,nok you get the picture.
To my regret I invested in eight aggressive funds which have had unbelievable losses.
artmx,artix,mfocx,jaenx jaglx,sgrtx,pogsx,wogsx.
I have no cash. I have decided to gradually start aim programs as they come into the black as I can do no buying at this time. Do you think this may work?
How long before I can book some profits? I am asking the impossible of you but perhaps with your long term experience, you may have a clue.
Thanks for your time and consoling sunrise,
P.
A.......
I can understand the position you are in. Many times
after a market run like we had it seems like the first beating is the fall-back, but then the second comes along - paying capital gains on the previous year's activities!
In your case it probably looks pretty nasty right now. I just read in Barrons this AM that essentially the flow of money into retirement accounts, 401Ks, etc. hasn't changed much in the last year and is actually up a bit.
However, the allocation of those new dollars has shifted heavily from "aggressive growth" and other types of hot funds to growth and income types as well as a very serious amount of money going to money market accounts and bond funds. Add to this that many stock fund managers are trying very hard to not look dumb at the end of this quarter, they're also holding higher than usual cash reserves inside their own accounts.
The net effect is that there's a lot of "purchasing power" on the side lines. Much of it is literally only a phone call or email message away from the market place. Some retirement plans only allow monthly allocation adjustments, but even a month isn't that long of a time. So, once the flow of money starts to return to the market, we could see quite a nice recovery.
Since you're currently out of "dry powder", you may want to set up your AIM accounts to start selling essentially immediately after they become profitable. So, instead of using your average cost on the mutual funds as your Portfolio Control, you may want to reduce it a small amount to get AIM to start taking money out of the market as soon as you pass the average cost mark. Depending upon what you use for your Sell SAFE, your Portfolio Control value might be only 90% of your average cost value. This will give you the quickest rebuild of your reserves. Once you have some cash set aside, AIM will guide your use of it.
I started my AIM accounts in January of 1988 right after the crushing October "crash" on '87. I started with zero cash reserves and let AIM help me work my way back to profitability and liquidity. It works. It took a year, approx. to get back to a comfort level and by 1990 I was ready for the "Gulf War" correction with plenty of cash.
Hope this helps,
Tom |
