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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 (10618)	3/27/2000 2:15:00 PM
From: LemonHead	Read Replies (2) \| Respond to of 18928

Hi Bernie and ALL, I have a few questions regarding setting up Newport for new AImers. I have been out quite a bit lately helping folks get started. Most have a few stocks and funds, with little cash reserve. I appreciate all thoughts and comments. Here are the questions and my responses (right or wrong). I purchased the stock six months ago, Do I use my purchase price or the closing price as of last Friday? My response is to use the current price. I don't want you to make any buy or sell decisions right out of the gate. If the stock is much higher than when you purchased it, then the software will recommend a large sale right now. The opposite will cause a large buy if the value is much lower. Overall I prefer that you don't buy or sell in the 1st month. But if you feel that you should, call me and lets review the situation. Based on the current IW Data, you are saying that if I have $4000 in equity I should set the Cash reserve at $6000. I'm Confused because I don't really have the $6000. Well yes, no and maybe. If you don't have the reserve then I would prefer that you set the cash reserve at a lower value then what the IW currently recommends. I would like to see some selling occur that will build your reserves and bring your cash reserve % closer to current IW values. I also want to limit the buying since we don't have the proper reserve. I would also like for you to set the same equity up in another directory and set the Cash reserve on this one to the current (60%) IW recommendation. Then paper trade the results as AIM directs. You say in a taxable account to leave the Sell/Buy safe values at 10%. But you want me to set the minimum dollars to trade between $500 and a $1000. Also you want me to set the minimum shares to trade in a range from 5% to 10% of total shares. Why don't you just set the Minimum dollars to $750 and the minimum shares to 7.5%? This is where I want you to become familiar with the "WHAT IF" function. Each one of your holdings is different. Different share amounts, different values, different industries etc. In order to maximize the potential and minimize the risk over time, the value settings need to be set differently for each equity. It's important that you learn this on paper as you update your different directories on a weekly basis. <On the Mutual Funds you said to set the "Buy Safe" at 0% and the "Sell Safe" at 8%. Do I use the same setting in a taxable trading account verses an IRA account? Good question. I would assume that most of the discussion on the AIM BB is about Funds in IRA accounts. Therefore I would say that you should raise the "Sell Safe" to 10 or 12% in a taxable account. In closing. I'm have given you a complete socket set. Does that mean that you can rebuild an engine tomorrow. I don't think so. We need to study and practice for a while. Right now I would like for you to put all available investment cash in a money market fund and update your AIM weekly. As you move along things will start to come in focus and then you can begin to trade. I've had Newport set up for a month now. Nothing is happening and I don't think any of the settings are correct. What night do you have free? I will come over again and we will start back at Question #1... Don't Forget the Dickel. Keith - Substitute Teacher