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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (7709)	6/15/1999 12:54:00 AM
From: RFH	Respond to of 18928

Hi, Keith. It sure sounds like $2K is a pretty small sum to start AIMing. I'm currently managing an account in an IRA which started the year with $4K, (and was reluctant to do it for an associate of mine) and I'm trading a mere 20 shares at a crack. I'm ahead by about 10%, but that's only a couple hundred dollars. I don't know about this, but I'm sure someone else will chime in. Sincerely, RFH

To: LemonHead who wrote (7709)	6/15/1999 8:39:00 AM
From: Bernie Goldberg	Respond to of 18928

Hi, Realistically, I don't think you can start an AIM program with as little as $2000. Assuming a 60/40 stock/cash split you would have $1200 in stock and $800 in cash. Using 10% safes and $500 minimums you would have to wait too long between buys and sells. Another thing to consider is expense. With $1200 invested in stock each roundtrip represents a greater than 2% of investment in commissions.at $12 per trade</> The average Mutual Fund charges 1.5% per year. I like to consider funds that charge less than the average. American Century charges 1% for example. I think a better solution would be to use Twinvest with a Mutual Fund. If you can get hold of the August or September issue of Forbes Magazine you will find a list of Mutual Funds with ratings in up and down markets. You will be looking for funds that are "A" rated in up markets and "D" rated or worse in down markets. That will give you the biggest swings possible with funds. After you've got your list of funds go through it and pick out the type of fund they are most interested in. Following Twinvest there would only be buys of different sizes at regular intervals. Eventually you would reach what I consider an AIM minimum of $10000. Hope this helps. Bernie P.S. Mr. L. talks about Twinvest on Page 225.

To: LemonHead who wrote (7709)	6/15/1999 10:05:00 AM
From: JZGalt	Read Replies (1) \| Respond to of 18928

Keith, I'd have to agree with Bernie. You can't run $2k AIM account without making Waterhouse rich. Your just going to have to select something with enormous potential and set the sell safe at a very high level to make this worth while, but then you are almost in the buy and hold camp. With $2k, I suggest a good fund that beats the S&P without charging you an arm and a leg. This is the paradox of investing IMO. If you have only a little money you are sometimes stuck in the least profitable outcome unless you are willing to take a risk on one (perhaps two stocks). The other paradox is if you have only a little money you are much more likely to be a novice investor and therefore less likely to put the money into a winner. IMO funds are the way to go until you get up into the $10-$20k level and can buy a few individual stocks and have learned techniques for selecting winners. Remember AIM won't save you if you select a company that goes straight down and doesn't recover. Given the number of internet IPO's lately, that is more likely to happen now. Last time was the biotech craze when only Amgen and a few others made good money for investors and the rest just blew away in the wind. ---- Dave

To: LemonHead who wrote (7709)	6/15/1999 2:14:00 PM
From: OldAIMGuy	Read Replies (1) \| Respond to of 18928

Hi Keith, Have to concur with everyone here so far. If you want my opinion on the FORBES magazine issue of mutual funds, go to my MUTUAL FUNDS FOR AIM page: execpc.com I've sorted the funds to make up as good a list for AIM as I can. The smallest AIM account I ever started was at $3600 total and it has done nicely in the last 9 years. However, don't expect more than about one trade per year average and lots of "vealies" along the way. Remember that if there's even a $250 minimum order at the fund, it will be a HUGE trade compared to the invested side of a $2000 account. So if you sell once, there will be a long stretch of "vealies" before the next sell order is placed. TWINVEST is a great way to get an account up to size while also building a cash reserve for future AIMing. This is the best bet for a small holding. Best regards, Tom