Thanks @Clive,
thought provoking as usual.
I am in the middle of doing some AIM backtesting using 2X and 3X underlying equity. Since leveraged ETFs don't go back a long time, I will manually create the data in Excel based on daily movements of an underlying index.
To avoid leverage, one would have to set a min cash percentage (buy vealie as you referred to it in one of the posts).
So the three tests would be:
1) Standard AIM with 20% Cash. This would be the benchmark.
2) AIM with 2X underlying index, 60% cash, 50% buy vealie.
2a) 40% buy vealie (1.2 leverage) would be a good test as well
3) AIM with 3X underlying index, 73.33% cash and 66.67% buy vealie
3a) 60% buy vealie (1.2 leverage) would also be a good test.
I have a feeling the 3X test will win, all things (almost) equal.
I have a feeling you have already done these tests :). I will post my results in the next few days.
