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Strategies & Market Trends : AIM Questions and Answers

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To: Nimbus who wrote (202)10/23/2001 3:02:19 PM
From: OldAIMGuy  Read Replies (1) of 221
 
Hi N, I see that Keith kindly put up a couple of previous posts on the subject. Here's one that may also help.

Message 14045470

If all the stocks are in a common industry, then you should be using the higher value for the IW - right now 30. If it's broadly diversified including some bond funds and other conservative investments, then you can reduce the total cash reserve somewhat. Generally I let each stock rise to its individual cash reserve max (the Idiot Wave recommendation) and want the overall cash reserve for the entire portfolio to rise to about what the IW's suggesting for diversified mutual funds.

So, if your Investment Pyramid looks like something built in Egypt, you can use a lower cash reserve, but if it looks more like the Washington Monument, then use a higher cash value!

Hope this helps,
Tom
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