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

To: OldAIMGuy who wrote (5202)	7/28/1998 10:52:00 AM
From: JZGalt	Read Replies (1) \| Respond to of 18928

<<<He wanted the best possible performance initially, so included a smaller than normal cash reserve so the anchor wouldn't be as heavy in the next up-tick.>>> Actually, it was simplier than that. I was looking at a system that had developed over the years to determine when a group is overbought and oversold at the same time I had "discovered" the AIM methodology. The system used the percentage of stocks in the group exhibiting positive point and figure chart patterns to set a "risk" in that group between 0% and 100%. securitytrader.com used to be a free service so I thought I could use it to regulate my cash levels both initially and on the upside if necessary. At the time Mike decided to start the newsletter, and I decided that buy and hold strategies needed a bit of work, the oil service sector was at the 25% level, but had not yet based (early July). This seemed more reasonable (to me) than arbitrarily setting a cash level, or starting out at the 50% cash level suggested from various sources. Some of the things I have seen around look at the overall market picture to try to set and maintain cash levels. This is good for a diversified AIM portfolio where your "risk" mirrors the general market, but I think is unwise when selecting individual sectors of the market. This doesn't mean I am correct, it is just the way it was done. I should again stress that this is still an academic exercise. ---- Dave