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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 (13453)	11/5/2000 1:00:52 AM
From: OldAIMGuy	Respond to of 18928

Hi Keith, It's a goal, not a mandate to raise cash to that level. Remember that I keep the overall cash at about what the IW asks for mutual funds, but individual investments I let rise to their IW Stock level. You have to remember that my overall portfolio has stocks, mutual funds, bond funds and even real estate in it. So, it truly is a diversified investment portfolio. Each class of investment has its own level of cash as a high point. My govt bond funds I usually only let rise to 10% to 15% cash at the peak. So, the overall mix is about what I'd want for a mutual fund investment. The IW is a moving target. Lucky for us it's been moving "down" in recent weeks just when the market has been giving us some relief and letting us start to do some selling. In a balanced portfolio many stocks can be up or down together but there's always a few that are out of sync with the rest. Some might be fully funded in cash right now while others are naked of reserves. I let each seek its own level as AIM would have it. I also limit the maximum cash of each individual investment at its "appropriate" level (that's a judgement call). I also keep track of my overall cash reserve relative to the IW's suggestion for mutual funds. If the total portfolio reaches a point where it's fully funded with cash then many times we're near a market top. Right now my overall cash reserve is around 20% - relatively high considering what we've been through. I have several stocks that were tapped out and I also am in the process of deciding what to do with the rather healthy cash reserve that was raised by one or two of my biotech stocks. I didn't let AIM have that cash back for those stocks as they are really "peak of the pyramid" issues and really don't belong in the midsection or foundation of my investments. They had become so valuable (briefly) that AIM and I had raised a magnificent amount of cash. It's been my thinking to re-deploy that cash in some other fashion (probably Uncle Sam's wallet!!). Most likely a broader based mutual fund in the same sector. Best regards, Tom