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

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To: Steve Grabczyk who wrote (15110)	3/5/2001 2:58:04 PM
From: OldAIMGuy	Read Replies (2) of 18929

Hi Steve, So far the VTSS warning hasn't done too much in normal trading hours. I've been considering a new "rule of thumb" for AIMers. It has to do with linking the cash reserve percentage to trade frequency. The idea would be to assume approximately a 50% cash reserve as your peak for a stock. Then we'd use 1/3rd of the cash (1/6th of the portfolio value) for buying as often as once a week. This would allow us to participate in minor market corrections that happen frequently. The remaining cash reserve would then be used only on a monthly basis to reduce the "cash burn rate" should the decline deepen and lengthen. The first third then would be our "quick trading" money while the remainder would be our "Uncle Scrooge" money. I welcome any comments on this idea. Best regards, Tom

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