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

To: greg welch who wrote (5592)	9/8/1998 2:22:00 PM
From: OldAIMGuy	Respond to of 18928

Hi Greg, Sounds like plenty of opinion with not much study to back it up. As we've all found out over the years, this is true of most opinion. The example is a bit crude. A 10% decline won't trigger the first $250 purchase, but a $50 purchase - if one is interested in making that small of a trade. It'll take about a 14% decline to actuate a $250 trade as stated in their example. Here's the same example run again in REAL TIME AIM. Start with $10000. Buy stock for $5000.. Balance: Stock - $5000, Cash - $5000. (No commission costs need to be deducted unless it's to be deducted from any other system of buying stocks in a comparison) Stock drops 14% after one month. Buy stock for $250. Pay $10 commission. Balance: Stock - $4550, Cash - $4740, Total = $9290 Stock rises 15.6% next month (so we're practically where we started). Stock value is $5260, Cash - $4740 (no interest!), Total = $10,000. NO SALE JUSTIFIED BY AIM. Price continues to rise. Stock Value is now $5975. Sell $252 of stock. Pay $10 commission. Balance: Stock - $5723, Cash - $4982, Total $10,705 NET. Bottom line - You gained $705. Your broker $20. Conclusion - Motley Fool BB replies were poorly informed! Best regards, Tom