AI
Tuesday, November 23, 2010 5:33:43 PM
Hi Clive, Re: AIM Executive Summary.......................
Your point is expressed well. It's the compounding effect of the system that builds above average returns over time. A single component or a single cycle isn't usually enough to show the potential.
On another aspect of investing, the relative value of diversification can be demonstrated properly by looking at the same components over different time frames. Below I've prepared a graphic showing the ten components I'm currently using for my UBH retirement account. The "eleventh" component is CASH, of course, since these are AIMed components. They show:
- Latest Quarter
- Latest 12 Months
- Change since March 9, 2009 (market bottom)
- Change since youngest component availability (July, 2007)
With such images we see the relative importance of each component during various parts of this history. For instance, the precious metals component since the market's low has been less important than its value to the portfolio since the earliest date. Also, the Vanguard REIT component looks somewhat unspectacular in the earliest dated graphic (bottom image) but from the market Low, it has performed very well indeed, up around +160%.
It would be a difficult task even with a good crystal ball to have guessed which area would have been the "hot" area at various points in time. By owning all and managing them individually with AIM or some other balancing system takes care of potential missed opportunity. Any one component might be over or under weight at one time only to be the next shining star at another.
Best regards, Tom
Your point is expressed well. It's the compounding effect of the system that builds above average returns over time. A single component or a single cycle isn't usually enough to show the potential.
On another aspect of investing, the relative value of diversification can be demonstrated properly by looking at the same components over different time frames. Below I've prepared a graphic showing the ten components I'm currently using for my UBH retirement account. The "eleventh" component is CASH, of course, since these are AIMed components. They show:
- Latest Quarter
- Latest 12 Months
- Change since March 9, 2009 (market bottom)
- Change since youngest component availability (July, 2007)
With such images we see the relative importance of each component during various parts of this history. For instance, the precious metals component since the market's low has been less important than its value to the portfolio since the earliest date. Also, the Vanguard REIT component looks somewhat unspectacular in the earliest dated graphic (bottom image) but from the market Low, it has performed very well indeed, up around +160%.
It would be a difficult task even with a good crystal ball to have guessed which area would have been the "hot" area at various points in time. By owning all and managing them individually with AIM or some other balancing system takes care of potential missed opportunity. Any one component might be over or under weight at one time only to be the next shining star at another.
Best regards, Tom
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