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

To: HighTech who wrote (8544)	9/18/1999 1:52:00 AM
From: Dataminer1	Read Replies (2) \| Respond to of 18928

Hey Hitech, So many questions! Undoubtedly, you will have to do some digging on your own to answer many of them. Perhaps others here will help to elaborate a bit.... Can you tell me what the Newport software does that your new PCA version does not do In my opinion, Newport is best for managing real-life AIM stocks and includes Tom's great enhancements to the system. The PCA system, in it's present version, is best used as a back-testing tool. The upcoming PCA, will combine both features, and is being designed for infinite flexibility as far as the "adjustable parameters" and will be the AIMers dream since we're willing to add anything we can find to enhance the system and make it more usable. Can you give me your opinion on what is the best way to set A.I.M. parameters for someone who just wants to buy index stocks...I don't mind high risk and the "book" method for AIM is much too conservative for me The hardest thing is determining the appropriate beginning amount for the cash reserve at the outset. It's possible to start with none, counting on a price rise to fund the reserve, though you must be prepared to pony up cash should the first trades be buys. With either AIM software program, it's possible to be as aggressive as you wish, however as you deviate from the original algorithm, you run the risk of making the wrong "subjective" call. I think most here would agree on a high sell resistance and a low buy resistance coupled with a minimum trade amount of 5% of the portfolio for index funds since they are fairly tame. I hear UOPIX may be a good AIM vehicle for indexing, though being "aggresive" and using indexes with AIM is quite contradictory, unless your thinking "long-term, over many market cycles". I am looking for a way to systematically buy dips and sell on the way up to add more cash to buy dips,etc. Ahh...brilliant strategy! Many investors do just that, but kind of "wing it". What's nice about AIM is that is "sizes" your trades for you "systematically". Then there's the compounding..... I don't want to watch them every day necessarily but will if that will provide the maximum profits. I would prefer updating about once per week. There are 2 ways to go. You must choose your own path.... You can execute trades using the "next target price levels", and set GTC orders, or you can choose to update prices on a "time value" basis, and leave the details to AIM. Most seem to gravitate to the former, though your choice of equities should be a consideration on this point. If you were trading a volatile stock, you would want to have your buys and sells executed automatically with GTC's. Using an index fund, bi-weekly updating should work fine over time. It sure would be nice to do the backtesting to see which provides greater returns - daily/weekly/biweekly/monthly. I gather your software can allow these tests to be done quickly. It's a bit tedious now, but will be a snap once the PCA upgrade is released. Then we will have the capability to compare the "GTC" and "time" methods, along with the effects of adjusting the numerous parameters. AIM, on the surface, looks fairly cut and dry, but when you take the time to delve into the complexities, it can be quite an eye-opener. I suggest you spend some time sifting through all the available resources on the AIM related websites. There are many subtle aspects that have been added since the book, and it takes time to evaluate them all and determine what's best for your individual situation. Regards, D1

To: HighTech who wrote (8544)	9/18/1999 9:10:00 AM
From: Bernie Goldberg	Read Replies (1) \| Respond to of 18928

Hi, Can you give me your opinion on what is the best way to set A.I.M. parameters for someone who just wants to buy index stocks such as SPY, MDY, DIA, QQQ, XLK, XLP, XLF Pages 106 thru 115 show a 10 yr performance record of AIM with the NYSE index. Buy and Hold $472 loss. AIM $4459 profit. If you don't mind high risk, IMO two of the SPYDRs you mention could be replaced with Mutual Funds. ULPIX to replace SPY and UOPIX to replace QQQ. The indices they represent are the same but because of the use of futures they produce double the profits (as well as the losses). This is like manna from heaven for the AIM investor. It is recommended that you open an account with ProFunds as they do not charge any transaction fees compared to brokers who charge anywhere from $25 to $75 per transaction. I have my safes set at 8 and get plenty of action. Hope this helps. Bernie

To: HighTech who wrote (8544)	9/19/1999 8:26:00 AM
From: OldAIMGuy	Respond to of 18928

Hi again HT, For the majority of index funds you would do well with a 10% SAFE (resistance) for Selling and 0.0% for buying. In most cases a max of 33% should be plenty. If you're going to used one of the "souped up" funds like UOPIX, it will require better balance between the buy and sell SAFE levels. I'm currently using 8% for both and Cash Reserve at the level recommended for "Stocks." Last Fall's dip proved to use that cash very effectively when back-tested. AIM will do its best during a bull market, but will rarely beat methods with a higher risk level. It's hard to de-couple Risk-Reward!! However, given enough market cycles, AIM will eventually beat Buy&Hold. Time and the number of cycles is what AIM needs to prevail. If you have the ability to add cash to the system periodically, they you can get away with a lower cash reserve starting point. Those who are working should be able to do this. Those of us who are effectively retired must make due with what's already there. Hope this helps, Tom