Replies to post #27 on Systematic Investing Group (SIG)

[lostcowboy]

I thought I would put in here some interesting numbers. We will use the numbers from Mr. Lichello $10,000 to $1,000,000 chart. The numbers go like this, $10, $8, $5, $4, $5, $8, and repeat. We do this for 10 years, or 120 monthly periods. We will use $100 a month because if I am ever able to invest that is most likely the amount that I will use. So we will invest a total of $12,000 dollars. Our ending stock price is $8.

For DCA you invest a total of $12,000, at the end of ten years you have a total of 1998 shares worth $15,984. Average cost is $6.01 a share.

For Twinvest We use a code of 600 (based on a share value of $8), as this gives us the greatest profits, For a total investment of $12,000 you end up with 2199.75 shares worth $17,623. Average cost of $5.44 a share.

For Synchrovest We will use Mr Lichello's original rules of selling at a profit of 100%. We have one sell on the seventh month of the eighth year.
For a total investment of $12,000, you end up with 3,785.85 shares worth $30,286.79. Average cost of $5.18 a share. We also have a cash reserve of $739.20 for a total portfolio of $31,025.99

For my modified Value Cost Averaging spread sheet. We use a Value growth rate of 9% a year divided by 12, the interest on the cash is zero for this.
For a total investment of $12,000, you end up with 1814.2 shares worth $14,513.57. Average cost is $5.16 a share. We also have a cash reserve of $41,265.54 for a total portfolio of $55,779.11
You know that is a lot of cash to have setting a round doing nothing. Lets raise the value growth rate, till we have the greatest profit. Of course you can't do this in real life.
If you raise the growth rate to 45%
For a total investment of $12,000, you end up with 20,476 shares worth $163,806.92. Average cost is $5.56 a share. We also have a cash reserve of $86,698.70 for a total portfolio of $250,505.62

Have you wondered how AIM would do If you invested $12,000 for ten years? This is classic Aim, 50% split, one safe set at 10%, minimum sell,buy set at $100.
For a total Investment of $12,000, you end up with 458,785 shares worth $5,139,992 I did not keep track of average cost. You have a reserve cash of $1,889,797 for a total portfolio of $5,560,077

Well this has been interesting, but lets untie Synchrovest hands shall we!
We will make only one change, we will sell at a profit of 50%, not 100%
For a total investment of $12,000, you end up with 7,066,993.46 shares worth $56,535,947.69. Average cost is $5.39 a share. You have a cash reserve of $6,923,716.23 for a total portfolio of $63,459,663.91. Note this is the best that it gets, if you raise or lower the sell percent from 50 percent, the total profit will be lower.

[lostcowboy]

Hi all, I have replaced vca_gainloss with va_mod_gainloss.xls. va_mod_gainloss.xls now has both growth rates, it is still set up to split the monthly installment between a stock fund and cash. The cash is built up until you need it. Note, in the event of a deep diver it will still sell below the average cost. If you want to use it what I would do is run Michael Edleson va_readjustment.xls spreadsheet, that will give you the starting monthly installment. I would then multiply that by 1.25, that will give you the amount to invest in va_mod_gainloss.xls. In va_mod_gainloss.xls you should use the same growth rates, and set the percentage to be used right away at 75%

The way I have set it up you will never be asked to come up with more than the monthly installment, even if the cash goes dry, but if you have the cash in the 401K, it will ask for it if it needs it. Worst case, you have a mutual fund that goes down and just lays there, You will do at least as well as DCA.