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

To: Bernie Goldberg who wrote (7842)	6/30/1999 8:59:00 AM
From: OldAIMGuy	Read Replies (2) \| Respond to of 18928

Hi Bernie, I think that was SkipperR on the UOPIX Thread that took the ST gains. I don't believe he's an AIMer (?) but am not sure. Lots of ways to skin a cat, but selling completely out of a fund with the largest 100 cap stocks in NASDAQ seems a bit extreme to us AIMers. There's a guy on the LMVTX board that did a similar thing recently. About all he's gained so far is to collect some money market rates while the fund is swimming about in a confused market. I don't know whether the interest on the cash (after tax!) will make up for the capital gain tax with which he is now faced. He picked a great fund, why didn't he just stay with it? Mr. Phelps in his book "100 To 1 In The Stock Market" drives home the tax inefficiency of short term trading. People get really upset buying a LOAD mutual fund because they then have to earn back the commissions to break even. Yet many people will sell an investment with a "profit" and not think twice about the fact that they now have to "earn back" the taxes! As AIM investors, we do pay some capital gains taxes, but no where near what the ST Trader does when using the same investment vehicles. AIM is relatively benign from a tax point of view. Our LIFO gains should always cover trading and tax costs and still leave us plenty to reinvest when the time is right. With the market being so generous in the last few years to most investors, a compound gain of 14.5% (a double every 5 years) seems trivial. Yet, to accomplish this average over a 20 year investment time frame is a major challenge. Most SI members are trying to hit home runs and tend to forget about how many innings are left. I'd guess there's more strike-outs than we hear about, too. Most practice the only risk management method they know - take all their money out of one investment and put it in another. AIM is another risk management method. Anything that reduces short term risk also tends to reduce short term rewards. This is why the hyperactive trader doesn't see value in AIM. AIM's there for the whole game and not just a pinch hitter in the first inning. AIM understands the old saying about winning a Battle and losing The War and works to correct the problem, one skirmish at a time. I'll bet any one of us could list a dozen stocks that we knew of 10 years ago that have risen 100 X the price back then! Given enough cycles, AIM probably will beat the Buy&Hold investor with those SAME STOCKS!!! If nothing else the AIM investor, because of AIM's risk management, will sleep better most nights! The key word in Risk Management is the Management part. If we're going to run our Equity Warehouses with a "shoot from the hip" style of management, we know what sort of performance to expect - erratic. AIM's beauty is its Consistency, its style is Smooth, and its benefit is the time it gives us to Concentrate on what it is we choose to invest! ST Trading requires the investor to spend every waking moment watching the loony bin on Wall Street to see which way the patient will twitch. I have better things to do with my time. There are lots of days that I don't EVER look at the open or the close or any price in between! I don't need to, my business manager, AIM, takes care of all that for me. Back to mutual funds for a moment. Only one fund family of which I know allows the investor to place AIM minimum trade orders at limit prices. It's American Century Funds. I've been a fan of theirs for years, and this feature has kept them high on my list. I like the ability to place those 5% orders well in advance of the date on which the fund meets or exceeds those limits. The orders remain in effect for 90 days. Then I just renew them if there's been no trade. I don't have to be there near the close to place that order. Boy! I really sound lazy, don't I?? Thanks for making room here on the Soap Box!! Best regards, Tom