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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 (10619)	3/27/2000 4:38:00 PM
From: OldAIMGuy	Respond to of 18928

Hi Keith, Your advice seems sound for the folks that you're helping - especially the part about the Dickel. The "getting started" part always seems a bit confusing, especially when there are stocks or funds involved that have been owned for a while. I address some of this in the Q&A pages at the web site, you may want to reference those as well. execpc.com and execpc.com Containing people's enthusiasm for a whole month may prove to be the biggest challenge. Like the E*Trade ad where the kid is showing the boss how to buy shares on line, most everyone wants to get started right away. If it helps, you can tell them that I've owned some stocks in my account longer than I ever held a single job!!! Depending upon with whom you are speaking, this might have an impact! Keep up the good work. Tom

To: LemonHead who wrote (10619)	3/28/2000 5:14:00 AM
From: Bernie Goldberg	Read Replies (2) \| Respond to of 18928

Hi, So far you've done a pretty good job answering most of the questions. There are a few comments I would like to make however. 1 If the stock is much higher than when you purchased it, then the software will recommend a large sale right now. This might not be such a bad idea if you the investor doesn't want to add any cash to the investment or doesn't have the cash. Assuming an investment of of $10,000 one could sell off 1/3 or 1/2 or whatever the IW called for to fund the Cash Reserve. If one goes along with the idea that AIM is a risk management tool then you can't argue that one of the best ways to reduce risk is to take some money off the table. 2 I also want to limit the buying since we don't have the proper reserve If you limit the buying price you're slowing down AIM which is probably causing the following questions about lack of activity. I would recommend leaving the safes where Mr. L. recommends. If the the investor doesn't have the money he simply doesn't invest. He would then see that the reason for poor performance lies not with AIM but with his underfunding at the outset. You could set the sell safes at a lower value so that the stock could fund its own Cash Reserve. 3 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%? These are ranges they are not minimums. $500 is a minimum transaction. The reason Mr. L. suggested $500 is because of expenses such as brokerage fees, taxes, time spent, etc. He said in his book that transactions below $500 were "too small to fool with". IMO one of the most brilliant ideas in AIM is the 5% of the portfolio recommendation or $500 minimum. Let's say an investor has started an AIM program with $3000 in stock (300 shares @ $10) and $3000 in Cash Reserve. Assuming the price goes up to $15 and AIm says sell 30 shares. 3015=$450, not enough for an AIM trade. The investor must understand that AIM is very much like a railroad train standing still at the station. With a small amount of $$ invested AIM will move very slowly at the beginning and gradually pick up steam. With the same stock as above except for 500 shares and $5000 startup AIM would recommend selling 50 shares (5015+$750). This is a trade that the AIM investor will make since it is above the $500 minimum. This is elementary since the person with less money to start out with doesn't want to be selling so soon. he wants his funds to grow. AIM does this A U T O M A T I C A L L Y. My major recommendation to all of the questions you have proposed, is to pour yourself a glass of Dickel and sit down and read Mr. Lichello's book. A criticism I have seen of HTMAMITSMA is that it is too wordy. It really isn't. It contains all the words necessary to answer these questions. Hope this helps. Bernie