67% is leaning on the high risk button just a bit, whatcha think?
From the low cash reserves of 12% indicated back in March 09 (message 135) when the FT100 was at 3500 levels, to current indicated 67% cash against a FT100 of 5100 (nearly 46% up from that March low) - it's saying a bit too much - too quickly.
That is further highlighted by the RV's (as shown in iBox) PE component which at 17.6 (red bars in the chart) currently is a high relative to the 4 years of data shown in the RV graph. It would only take base rates to rise a bit to push the combined PE+BoE above the higher (white line) band into high risk territory (presently at 20.72)
If you consider the stock exposure side to be a martingale play e.g. add as share prices decline, reduce as share prices rise, whilst the 'cash' side is deployed in anti-martingale (let winners run, cut losers quickly, trend is your friend etc.), then the 67% in anti-martingale, 33% in martingale suggests a heavier bias towards continuing to run gains, but cutting losers quickly is more preferable to buying dips/pull-backs at the present time.
As the white lines re-converge again with the bottom value pulling upwards and maybe the top also extending upwards, as would occur during a Bull phase
so the risk profile would adjust to centralise indicated exposure/cash levels.
Another way to view it is the indicated stock exposure of 33% in aggressive (AIM stock part) and the 67% in defensive. If you kept 'cash' as cash then yes 67% is high. If you used for example Permanent Portfolio holdings as the defensive part then cash-drag is minimised. I personally use a stop-loss style for the defensive, within which all prior 12 runs (one started each month) up to March had been stopped out, but the ones running since March are doing well, but will cut out quickly should a turn around occur (I use stops set at 5% below the original purchase price).
To date, of the 7 stop-loss based runs (i.e. monthly positions) started since March 09 : March and June have been stopped out, April's is up 31%, May up 21%, July up 21%, August up 12% and Sept up 5%
Best. Clive.
From the low cash reserves of 12% indicated back in March 09 (message 135) when the FT100 was at 3500 levels, to current indicated 67% cash against a FT100 of 5100 (nearly 46% up from that March low) - it's saying a bit too much - too quickly.
That is further highlighted by the RV's (as shown in iBox) PE component which at 17.6 (red bars in the chart) currently is a high relative to the 4 years of data shown in the RV graph. It would only take base rates to rise a bit to push the combined PE+BoE above the higher (white line) band into high risk territory (presently at 20.72)
If you consider the stock exposure side to be a martingale play e.g. add as share prices decline, reduce as share prices rise, whilst the 'cash' side is deployed in anti-martingale (let winners run, cut losers quickly, trend is your friend etc.), then the 67% in anti-martingale, 33% in martingale suggests a heavier bias towards continuing to run gains, but cutting losers quickly is more preferable to buying dips/pull-backs at the present time.
As the white lines re-converge again with the bottom value pulling upwards and maybe the top also extending upwards, as would occur during a Bull phase
so the risk profile would adjust to centralise indicated exposure/cash levels.
Another way to view it is the indicated stock exposure of 33% in aggressive (AIM stock part) and the 67% in defensive. If you kept 'cash' as cash then yes 67% is high. If you used for example Permanent Portfolio holdings as the defensive part then cash-drag is minimised. I personally use a stop-loss style for the defensive, within which all prior 12 runs (one started each month) up to March had been stopped out, but the ones running since March are doing well, but will cut out quickly should a turn around occur (I use stops set at 5% below the original purchase price).
To date, of the 7 stop-loss based runs (i.e. monthly positions) started since March 09 : March and June have been stopped out, April's is up 31%, May up 21%, July up 21%, August up 12% and Sept up 5%
Best. Clive.
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