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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 (17126)	10/20/2001 8:18:11 PM
From: rgammon	Respond to of 18931

Bernie, My useage of AIM, my understanding of AIM is that it should be used to enhance returns of long term holdings, and in particular, very volatile investments. Taming the volatility should attract more people to investing in these products. Many people in their 60s and 70s view investments in equities and bonds as tantamount to gambling. AIMers will continue their equity investments until they are no longer able to think logically and remember events/people from yesterday, last week, this morning. Useage of CEFs for income is a very acceptable useage. My only issue is that my personal asset base does not yet permit such useage. PPR is the symbol of the fund that I have been using. However, I now recognize that I should NOT have selected this fund for the purpose I had envisioned. A money market MF was really the only thing I should have bene using. Unfortunately I want/need to 'escrow' cash, isolate it from other activities in the account. I still have this need, I now need to explore other alternatives with my broker. The purpose of this 'escrow' is short term, a few months to as much as a year. Min purchase amounts need to be very small, well under $100. CEFs are nearly ideal, however the volatility interferes with the intended purpose. I have no problem whatsoever with you and Tom and your useage of ACG. Your primary purpose is income. Mine is AIMable investments, income is second fiddle. When you look at PPR, you MUST understand that it is an ultra short bond fund, nearly the exact opposite of ACG. Interest rates paid on its holdings are reset to the Prime Rate + ??? every 30 to 90 days depending on the covenents of the notes. So, the dividend rate should fairly closely track the movement in the Prime Rate. The dividend has dropped this year, and so has the Prime Rate. When the economy turns around and the Fed once again worries about inflation, the Prime Rate will rise, and so will the dividend. Yep, it is an income fund, but the income is NOT steady. Most folks will avoid it, especially when interest rates are falling. VVR is a nearly identical fund. BTW, have you heard about Auction Rate Preferreds?? They are available in taxable and tax free versions. Issued by the CEFs as a cheaper way to finance the 'margin' interest they are paying. The notes have a term of 7 to 21 days (in most cases). Min purchase is usually $25k, although this can range up to $100k in some cases. PPR converted its margin debt to these notes earlier late last year. Robert