Is it smart to combine other investing strategies with the Robert Lichello AIM method?

One unique feature of the AIM investing method from Robert Lichello is that you always keep half your portfolio in cash.

Besides this providing protection against a market crash, and serving as an emergency fund should you need it, this cash balance has another crucial purpose.

It provides the funds you use to purchase more stocks or LEAPS when there is a dip in price. You are always in a position to BUY when the price is right!

But some of my investors complained to me they didn’t have enough cash to make the buys AIM wanted them to make. How could this be if they are implementing AIM investing method correctly?

I checked their AIM spreadsheets (because I help them with their spreadsheet as a client.) The spreadsheet showed they had plenty of cash!

Then it dawned on me – and this client admitted to me - many investors mix other forms of investing in the same account.

In this particular case, this investor decided to place most of his cash into a precious metals index fund.

It turns out the value of this fund had decreased along with the other companies in his portfolio. Now he was in trouble because if he converted the index fund holdings back to CASH for the AIM buys, he would be selling at a loss!

He mixed his AIM portfolio with another form of investing. I think this is a bad idea. You may find you don’t have the necessary AIM cash to make a great buy because that cash is gone – used for a separate non-AIM investment. Not making buys when AIM tells you to defeats the whole purpose and mantra of the Robert Lichello AIM method: Buy Low and Sell High.

I suggest you have a brokerage account exclusively for your AIM investing. If you want to do other forms of investing then open a separate brokerage account for non-AIM trading. Or create a separate portfolio where you use these different strategies.

This practice will greatly help you manage your AIM account. You (and I as your helper) will always know how much money you have to use for AIM.

You want your brokerage cash account balance to be the same as your spreadsheet cash balance. Using AIM - and only AIM - in your investing portfolio will ensure you always have the cash to make AIM buys!!