A.I.M. Cash Burn Rate

CASH BURN RATE For AIM
(Thanks to Lou Dina for this information)

In an extended BEAR market, how deeply could you continue purchasing shares based upon various Cash Reserve starting points? Lou Dina was kind enough to prepare this example. You may fine it handy the next time the BEAR comes knocking!

AIM - Bear Market - Sustained Diving Market
(assumes market goes straight down )
Beginning Stock Value		$20,000
Beginning Stock Price		$100
Min Trade		$1,000
Based on prices dropping $2/share every period

Safe Levels Where Cash Reserve is Totally Depleted

Beginning
Percent
Cash Level

Price Pct Drop From Top 50% 33% 20%

100 0%

98 2%

96 4%

94 6%

92 8%

90 10%

88 12%

86 14%

84 16%

82 18%

80 20%

78 22% 5%

76 24%

74 26% 10%

72 28%

70 30% 5% 15%

68 32%

66 34% 20%

64 36% 10% 25%

62 38%

60 40% 15% 30%

58 42%

56 44% 5% 20% 35%

54 46% 25% 40%

52 48%

50 50% 10% 30% 50%

48 52% 35%

46 54% 15% 60%

44 56% 40%

42 58% 20% 70%

40 60% 50%

38 62% 25%

36 64% 30% 60%

34 66% 35%

32 68% 70%

30 70% 40%

28 72%

26 74% 50%

24 76%

22 78% 60%

20 80% 70%

In the Straight Down Scenario, varying minimum buy from $500 to $2000 (2.5% to 10%) has minimum impact on when cash is depleted. Under more normal "up and down" market conditions, it will trigger different buy and sell points and can affect share balance and final returns significantly.

Last Modified By: Default
Last Modified On: Tuesday, February 26, 2002 16:09:50

			Beginning Percent Cash Level
Price	Pct Drop From Top	50%	33%	20%
100	0%
98	2%
96	4%
94	6%
92	8%
90	10%
88	12%
86	14%
84	16%
82	18%
80	20%
78	22%			5%
76	24%
74	26%			10%
72	28%
70	30%		5%	15%
68	32%
66	34%			20%
64	36%		10%	25%
62	38%
60	40%		15%	30%
58	42%
56	44%	5%	20%	35%
54	46%		25%	40%
52	48%
50	50%	10%	30%	50%
48	52%		35%
46	54%	15%		60%
44	56%		40%
42	58%	20%		70%
40	60%		50%
38	62%	25%
36	64%	30%	60%
34	66%	35%
32	68%		70%
30	70%	40%
28	72%
26	74%	50%
24	76%
22	78%	60%
20	80%	70%
In the Straight Down Scenario, varying minimum buy from $500 to $2000 (2.5% to 10%) has minimum impact on when cash is depleted. Under more normal "up and down" market conditions, it will trigger different buy and sell points and can affect share balance and final returns significantly.