AIM Rebal Page
Note:
I can no longer recommend AIM Rebal, simply because I have not tested it enough. So use it at your own risk! If you want to test it and see for yourself that it will or will not work, it's up to you.

Disclaimer:
I make no claims as to the accuracy or viability of the information contained herein. This web site is presented for reference information only and not intended as advice to buy or sell any securities or funds or any financial sorts of things at all, of any kind.
Please! Use caution with any investments you make. It is possible to lose money by following my information and/or using AIM, AIM Rebal, PPO XOver or any other investment plan!

AIM Rebal is a method for buying and selling stocks in a 3 or 4 or even 5 stock Portfolio Combining Robert Lichello's AIM method (by the book) and a simple monthly rebalancing. I believe using this method will garner excellent returns over time that will beat the market and (not in all cases) beat regular AIM while giving the investor "peace of mind." Peace of mind is very important for someone who wants to do better than simple "buy and hold" but does not want to worry if the market takes a downturn, a person who even likes a downturn because it means picking up bargains. As a matter of fact AIM Rebal might even be safer than ordinary AIM in some cases since you would be diversified. I am using this method and am using it on 5 portfolios of 4 stocks each. I think 4 stocks in a portfolio would be the best number to use.

In order to do AIM Rebal you will need to have a portfolio of 3 to 4 stocks and would probably not want to start with an combined amount of stocks and cash less than $3000 to $5000. If you don't have this much money to invest then you will have a tough time gaining ground. So start saving your money!
Now! On with the show..........

An important note about AIM Rebal:
Using AIM Rebal on stogy old Blue Chips or any other low BETA stocks may not work that well, or at least if they are all of that type.
While more tests have to be done and it's extremely important to know just what works and what doesn't work and especially if your investing real money, my advice is to be very careful which stocks you use at this point. My previous tests were conducted with high BETA stocks and that may be where the real power of AIM Rebal is.

What is AIM?
AIM is a method that uses a simple but powerful formula for buying and selling stocks. It is easy to use and there are several sites devoted to the use of aim. The basic premise of aim is half your money is in stocks and the other half is in cash. As prices rise and fall the formula will tell you how much to buy or sell. The formula is typically checked once a month and the formula also adjusts itself so as to make the portfolio grow over time.

Aim by itself works quite well but it does have some shortcomings. Some of you who have experimented or used AIM will surely know. One of these is running out of cash. If you run out of cash on a decline and if that decline is not over and indeed, may not be over for quite some time in the future there is nothing you can do but sit on the stocks! It could turn out to be a disaster. What if you had picked ENE (Enron) for example. Picking good stocks is still very important
If you choose wildly volatile stocks you could easily run out of cash. Or you could sell most of your stocks too early and miss a big run-up in price.

Don't know AIM?
If you do not know how to do AIM go to this site http://www.jjjinvesting.com/chap2.htm and learn how.
Then come back and learn how to join these two systems for great profits.
Another great link to info on AIM. Or should I say the main link to AIM is here: www.aim-users.com
Also Tom has a great Discussion Board at: A.I.M. Users Bullitin Board.
And for those interested: AIM RE-bal Discussion Board

What is Rebal?
Rebal is short for Re-Balance. Lets say you have four stocks in your portfolio. Once a month or which ever reasonable time period you choose you would total up the value of those stocks. If you add the values of the stocks in your portfolio (lets say we have 4) you will come up with a total. In this case since we have 4 stocks you would divide the total by 4 and each stock will be compared with that ideal value. Some stocks will be higher and some lower. To rebalance the port you would sell any stock in the higher than the ideal amount and bring them down to that ideal amount and buy enough stock to bring the lower than ideal stocks up to the ideal value. It's as simple as that. Of course one would only buy or sell those stocks that are over or under by a reasonable amount to offset commission costs.
I have read on a web site talking about Re-balancing that Re-Balancing by itself increases portfolio value slightly in the long run. We want more than that though and that is why we add AIM to the mix.

Why Putting AIM and Rebal together works so well?
I don't know but it sure does!
Go here and learn to put the two together:AIM Rebal school

Question:What is the biggest problem when using AIM or AIM Rebal?
Answer: Running out of cash!
I did a test on a stock (High Beta type) that dropped by a large percentage. I was impressed by the fact that setting the ratio to 50/50 improved the bottom line by a little (-65% instead of -72% whoope). But setting it to 25/75 an astounding + 49%!

Stock/Cash % up down
75/25 -72%
50/50 -65%
25/75 +49%
Such a small difference can make such a big difference in the bottom line!
Why is this so?...... Cash!

Running out of cash is a major problem.
While the benefits of using a ratio of 25/75 would be hard to predict and indeed would not always be the best thing to do, I have observed that the popular ratio of 2/3 stock to 1/3 cash is or can be a costly ratio indeed.
If you do this, you have to monitor your cash very carefully. In particular with the high beta stocks that we love so much.
I've noticed AIM Rebal even has a tendency to run out of cash if using a 2 to 1 ratio. So I advocate using a 50/50 cash / stock ratio.
I know I said in AIM Rebal School to use a 2 / 1 ratio but I am rethinking that.
Now that I have a new spreadsheet aim-rb-temp.xls
I'm able to back-test the effect of the ratio and have found the 50/50 of R. Lichello the best. The author knew what he talking about.
But of course whichever ratio you use is up to you but just be sure to watch your cash!
Note: I have not fully tested the above spreadsheet. I only offer it in an experimental form. Use it at your own risk.
Go to Examples page to see current updated examples as of Feb 3rd, 2003
DOW JONES INDUSTRIALS AIM Rebal expamles Now updated as of December 1, 2002