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Strategies & Market Trends : AIM Questions and Answers -- Ignore unavailable to you. Want to Upgrade?

To: Philip Ng who wrote (135)	12/18/2000 12:20:57 PM
From: OldAIMGuy	Read Replies (3) \| Respond to of 221

Hi Phil, The adjustments you mention are "NON-AIM" events. They are handled differently than our regular AIM events of buying and selling on AIM's advice. If you have an account with 1000 shares in it and need the value of 500 shares worth, you would sell the 500 shares and reduce the Portfolio Control by the value received. All else remains the same. You are restarting the account at a lower point. Your buy/sell range will expand a bit unless you also were to reduce the sizes of your minimum trades by the same proportion. When your great aunt Nellie sends you your holiday gift and you decide to add it to an existing account, you do pretty much the reverse of the above example. You have 1000 shares of an equity and add 500 shares worth to it. You add the entire value of that 500 shares to Portfolio Control. Not half. Since this is a non AIM event, this is the alternate rule. If you are making withdrawals from the CASH side of an AIM account there need be no change to the internals. Best regards, Tom

To: Philip Ng who wrote (135)	12/18/2000 12:25:26 PM
From: Bernie Goldberg	Respond to of 221

Hi, Tom will probably answer this but I guess since I read it first I will put in my two cents worth. You asked:What happens in the reverse? eg When I get my bonus and I want to add it to the portfolio? What happens to the PC? I know that whenever a purchase is made, half the value is added to the PC but the PC is not touched when a sale is made. When you add Cash to your AIM program you haven't changed your market risk. PC does not change. If AIM wants you to buy shares and you add cash and then buy shares PC goes up by 1/2 the amount of the buy. If you add cash to your AIM program and make a buy thjat is not recommended by AIM your PC goes up by 100% of the buy since you are increasing your market risk. The following I am not as sure of as I am of the preceding. If you just remove cash from your AIM program you have not changed your market risk so I don't think you should change your PC. Hope this helps. Bernie