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

To: Steve Grabczyk who wrote (9816)	1/4/2000 1:14:00 PM
From: OldAIMGuy	Respond to of 18928

Hi Scott and Steve, With GSF, you are gaining quite a bit in yield, but are increasing your risk somewhat as well. It's my personal belief that GSF has been beaten down about as far as it can be for this portion of the interest rate cycle. It would appear that whatever the FED does, it is already priced into GSF. There are others besides me using GSF as its own AIM account. I recommend keeping about 10% to 15% liquid cash reserve for such an account. Then in times like we've had for about 18 months, you can accumulate shares of this high yielding fund. Other times you can part with a few to replenish your cash by taking a nice capital gain. For a temporary haven for money to be invested, GSF should work okay. Remember that it's not a money market fund and that all of it might not be there the day you decide to use if for another purpose. Several people are using bond funds of various lengths as a portion of their cash reserve to improve the overall yield. I'd recommend keeping 1/3 to 1/2 of the total Cash Reserve in money market funds where there's no hesitancy to use it for buying stock when AIM says to. Then if you exhaust that portion of the Reserve, maybe you'll say it's okay to take a small loss on the bond fund to buy a stock that's deeply discounted at 30% or 40% off its previous high. I currently take my dividends in cash on a monthly basis as I use it for my cash flow needs. However, there's no reason not to have them reinvest the dividends if you are fortunate enough to have a job! Best regards, Unemployed in Union Grove

To: Steve Grabczyk who wrote (9816)	1/5/2000 11:29:00 PM
From: SS Heatwole	Read Replies (2) \| Respond to of 18928

Hi Steve Thanks for the response, I'm glad to hear my idea of investing some of the AIM cash reserve has already been done. Still I need to understand what makes GSF tick. Does it trade like a stock? Is there any load? Looking at the chart it would seem that as the FED increased interest rates the price moved down, and I assume the yield went up as a result. Is the reverse true? and is that the down side risk? Lets see-- if the price goes down I get to buy more with a better yield, and if the price goes up I loose some yield but get a capital gain! This sounds to good to be true. I obviously don't understand something(not unusual). Things that sound this good I have learned to approach with caution. Any info. is appreciated. With yesterdays correction I took the leap on to the GNSS band wagon at 16 21/32, and am looking forward to a nice long ride. Regards, ssh