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

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To: JSLyons who wrote (17262)	11/9/2001 7:16:38 AM
From: OldAIMGuy	Read Replies (1) of 18928

Hi Johnathan, In the very last chapter of Mr. Lichello's revised book he mentions splitting off some of the cash to some short term bond funds to improve yield. Of course there's always the risk that the bond fund might be down in value/share on the day you want to "spend" it doing AIM buying. The shorter the term of duration on the fund the safer you tend to be on this. ACG tends to own primarily 30 year paper and therefore has much greater volatility than a ST bond fund. It's therefore unsuitable as a Cash Reserve substitute. The yield on the Cash Reserve is way down from not that long ago. However, it's still higher than the average Value Line stock which is paying just 2.0%. So, if you invested in an "average" stock and collecting the dividend in a flat market you'd not be doing as well as if you were in Money Market Funds right now. The cash's real value is in its Purchasing Power and what those dollars return when later they're taken back out of the market. Yesterday both QQQ and JBL clicked off AIM sales. Those dollars went to work just after the WTC attack. Some of those dollars were just returned to the Cash Reserve with about a 30+% gain included. They can now afford to rest on the sidelines for a while. Like a good football coach, AIM rests its good players once in a while! Best regards, Tom

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