In Mr. Lichello's book, he recommends that we start a new Twinvest account after a fund has tripled in NAV. The reason for this is that we will only be buying shares with 25% of our quarterly allotment and 75% of it will be going to the Cash side of the account. In the above example, the triple occurred in 1991 - almost 10 years into the investment. Instead of starting a new account, I just "restarted" it again with the new NAV and calculated a new TWINVEST Code but stayed with the same fund.

If you look at the graph in 1991, you'll see that the account is about 50% Cash Reserve at that point. By restarting TWINVEST again at that point, it revitalized the account and got the Equity/Cash ratio back in line over the next few years.

As you can see, if we were to start up an AIM account at the end period of the graph, we'd be all set. We already have a healthy Cash Reserve and a nice equity position. All we would have to do is set the Portfolio Control value equal to the fund's value at the time of the switch and we're up and running!

Note: Interest on the Cash Reserve was calculated at 5% per year.

First decide on the periodic investment amount. This could be any dollar amount with which you feel comfortable. Mr. Lichello recommends that it be an amount that you are willing to add every period come rain or shine. The investment/deposit period should also be decided - weekly, bi-monthly, monthly, quarterly.

To determine your "Twinvest Code" you take the periodic contribution and multiply by 0.75. This value is then multiplied times the price per share of the mutual fund or stock in which you are interested. So if you were to choose $100 per month and a stock worth $20/share,

1) $100 X 0.75 = 75
2) 75 X $20 = 1500 which is your Twinvest Code.

You won't have to calculate the Code again. Just write it down someplace where you'll remember it. Your first investment takes the 1500 Code value and divides it by the share price of $20 giving you $75 going to the equity and $25 going to a money market fund.

Next month the fund is worth $22. So you take 1500/$22 = $68 to equity and $32 to Cash Reserve. Etc......
The software from Newport Programs can be used for keeping up a Twinvest account. After establishing the initial account, you will want to make additions with each period of additional funds. Under the TRADE window you will select the ADD BOTH item. There you will add both the shares, price/share and cash allocation for that period.