AIM RE-BAL SCHOOL

First, you don't use SHARES and PRICE as usual in your AIM formula because you have to enter the Value of the whole portfolio where stock Value would normally be.
Second, a new entry would be made and that is 1/4 of the recommended buy/sell amount. Of course 1/4 assumes you are using 4 stocks in your port. If you are using 3 then it would be 1/3 ETC. Otherwise the AIM formula is the same as "By the book" except I start with 2/3rd of my money in stocks and 1/3rd in Cash. For my testing I do not consider commissions but I also don't add interest on cash since they would offset each other. In the real world these things would have an impact on your profit/loss as well as taxes if your not in a tax sheltered plan like a ROTH IRA or some such. Keep commissions low! If commissions are reasonable. Like $15 per trade or less, that will increase your bottom line. If you can't trade for $15 or less then you need a new broker!
So, lets see how it goes:
Let us assume we are using 4 stocks: XMSR BA AEIS RDC. We shall use 2/3rd of $10,000 or approx $1666 worth of stock for each one of our four. The rest is in cash. We set up a table like this either on paper or a spreadsheet. This is the RE-BAL part.

As you can see each stock value is worth roughly $1666 and totals $6687 which is close to 2/3rd of $10000.Some of the columns are blank on this table since this is only the set-up.

I have added all the values for XMSR, BA, AEIS and RDC and the TOTAL was $7,756 as shown in line 5. Below that on line 6 is the TOTAL divided by 4. This is what each stock in the portfolio should be worth before AIM is applied.

Next we go back to the TOTAL amount in line 5 and plug it into the Value column of AIM at line 10. In this case the number is $7756. Then as we work through AIM the amount for this month is an order to sell $293 worth of stock (.$7756 - 6687 = [1069 - 776] = 293) We divide that by 4 and get -73 (Because we are selling, this is a negative number if we were buying it would be positive). Then we plug that number into line 7. At "FROM AIM =" and get the one just below it, line 8, "IDEAL VALUE =" of $1866 by subtracting 73 from $1939.
Each stock value is then compared to $1866 in the VALUE column. For example: On line 1 of XMSR which is $1720. Compare that to the "IDEAL VALUE =" and as you can see XMSR is down $146 from the ideal value of $1866 in line 8.
We then buy 4 shares (rounded up) of XMSR for $160. 4 shares of XMSR does cost $160 (we make it a $ -160 since it's down from our ideal price. The rest are above the ideal) and now have 47 shares of it. 47 is in the "NEW SH" column. These will be transferred to the next months RE-BAL table.
Now we add all the values in the COST/RET column and get the total at the "TOT C/R =" of line 5. In this case the total is $ +292. We then add that to the cash balance THIS MO = in line 6 of $3313 (the cash we had set aside from last month) and we get a new Cash balance of $3605. We then add that to the CASH column in AIM at line 11.

Important: When you have a neg number in "TOT C/R =" on line 5 then you will use 1/2 that number to raise your PORT CONTR as required by AIM otherwise, as in this case PORT CONTR stays the same. So remember. PORT CONTR is controlled by TOT C/R in line 5 not AMOUNT in line 10. Some months AIM will say "0" in it's AMOUNT column. That means not enough to sell or buy. You will still do the RE-BAL! Just put a zero in the "FROM AIM =" on line 7. The IDEAL VALUE and TOT/4 will equal the same. Do what ever the formula tells you and if TOT C/R comes up negative then you will adjust your cash in AIM and 1/2 added to the PORT CONTR. The best way to learn this is to back test it on 4 stocks you like. Try to get volatile stocks that show a past record of hanging in there. Go back 2 or 3 years by doing it monthly. You should get the hang of it if you just think it through.

I hope these instructions have not confused you too much.

jibes