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

To: Todd Reichardt who wrote (15184)	3/8/2001 11:55:49 AM
From: Bernie Goldberg	Read Replies (1) \| Respond to of 18929

Hi Todd, You quoted Mark as saying:"does it make me more money overall?" I'd like to ask you a question about that statement. What is all? What is your criteria for being successful? What is success for you? Is it getting every possible penny out of every transaction? Do you always get in at the bottom and out at the top? Perhaps it's picking the best stock or fund of the year. I'm sure you made lots of money in '99 when you bought Qualcom at 20 and sold it 800. I just love it when I am quoted out of context. I don't think there is any doubt that all of us would like to have a portfolio that matched Tom's. I am also absolutely certain that you could look at any of his charts and pick out periods of varying lengths of time when Buy and Hold outperformed him. That is totally irrelevant. You asked:1) how much does it cause my portfolio worth to fluctuate, and how big of drawdowns do I have to be able to withstand to capture the added gains (i.e. the fewer times I have to tell my family to go into "tight-belt mode" the better) In my opinion what one chooses to invest in is more of an answer to that question than how. I've been investing with AIM for 6 1/2 years with a diversified portfolio. I haven't had to tell my family to go into a belt tightening mode yet. 2) how well does the strategy fit my personal psychology That's an easy one. The answer is extremely well. 3) how much time and attention does it require. That's also easy, about 60 to 90 minutes a month. The only reason it takes that long is because I am using AIM for 2 people besides myself. I actually spend more time than that on my investments, but that is not because it is required it is because that is what I feel like doing. In conclusion I would like to say that if one follows Mr. Lichello's recommendations on stock selection and also follows his recommendations on using AIM his chances of being successful ie. making money in the stock market are greatly enhanced. FWIW Bernie

To: Todd Reichardt who wrote (15184)	3/8/2001 12:06:04 PM
From: OldAIMGuy	Respond to of 18929

Hi Todd, Since we don't control the markets, we can only react to what has happened. Right now all across the nation companies are switching to "Tight Belt Mode" and the lay-off numbers are piling up. That's not within our control either. For those still employed, such nasty markets become interesting footnotes for the portfolio. For those of us who have built a personal business out of AIM and investing, we actually almost pray for bad markets once in a while so we can get our accounts back to fully invested. The overall business model I use can live out extended bear markets just fine. Best regards, Tom

To: Todd Reichardt who wrote (15184)	3/8/2001 3:09:28 PM
From: aptus	Respond to of 18929

Hello Todd, "1) how much does it cause my portfolio worth to fluctuate, and how big of drawdowns do I have to be able to withstand to capture the added gains (i.e. the fewer times I have to tell my family to go into "tight-belt mode" the better)" I certainly agree with the part about the drawdowns. When using AIM, you cannot simply look at the overall returns, but you must also consider the risk you took to achieve those returns. It's not beneficial to squeeze a small annual gain out of the system while increasing your risk significantly. "2) how well does the strategy fit my personal psychology" I agree here too. However since AIM balances cash and equity, you usually have "risk-free" cash on hand. Therefore as long as you can convince yourself it works with the stocks you're using, it should fit most people's psychology -- unless that person likes exposing themselves to greater risk (i.e. always being fully invested). Over the past five years those "fully invested" types made lots of money (more than AIMers on average). But most people agree that the past 5 years were not indicative of long-term market performance. We probably won't see a situation like that for a hundred years. What happened is "investors" only looked at the reward portion of the equation and didn't bother to look at the risk portion (as in your point #1). However with the current technology stock meltdown, people will be evaluating risk a little more closely (once they get over the shock of how much money they lost in just a few months). "3) how much time and attention does it require" This is always a concern. To me it is not beneficial to make a little better return if I have to significantly increase the time it takes me to manage my investments. However (so far) AIM's improvements don't require any significant additional time outlay to implement. The bottom line is that I agree with your points and really don't think you said anything different to what Tom has been telling us for years. Hope you continue to share your ideas and don't switch to "lurk" mode. regards, Mark.