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Hi All,
No trades in the UBA lately!
Here is my UBA with the latest updates of this week. The dip at Jan, 01 was 1.2% of total value and is the tax that was paid to our good government. So this graph shows the net value development of the UBA. I now see that the avg cost per share and the value per share are the other way around, will change it next time:)
On the Relative Strength front, VGK is now also under 1.00, this is because of the weakness of the euro. VGK corrected for the dollar/euro ratio is doing well for me. TLT is still weak, but stabilizing a bit. SHY is now reverting back to the MA crossover, when it hits the MA a change into SHV could be worthwhile.
I am thinking of adding EFV and VNQI to the mix. Have not made a decision yet, will do when I see a clear path to implementation that makes sense to me.
I hope we all have a Super-Aim year!
Best Regards,K
Hi Adam,
The book was posted here because it was a freebie and it had 500+ pages. Good value! :)
The conclusions were browsed in a fast way, to see if there was relevance for me. Only take out 2% from your portfolio yearly and you are safe, was the message I took out.
So its contents could be OK or not OK. :)
Another nice website (just information sharing):
http://www.ndir.com/SI/index.html
I like to look at the screens, to see if they are the same as mine. :)
Best Regards,K
Hi Adam,
Looking at the PP, the whole package must be considered. The 4 asset classes together with the interactions between them. When you look at a single asset class you miss the interactions.
That said, when emphasizing asset classes by eliminating the weaker classes:
When you hold IAU and VTI as a top 2(since earlier this year), you miss SHY and TLT, and you gain a bit in return. This is speculating of course.(holding only the strong classes)
Now using PFF and VNQ as a cash basis. My thinking would be to AIM those funds, along the lines of Toms IRA. During 2008/2009 PFF and VNQ had huge volatility. The cash part should have low volatility, as Lichello describes in his book, where he states that you could also use short term bond funds as cash. Maybe i didn't understand the question. I also use VNQ in the UBH. PFF is used in a different machine, maybe a CV vector construct.
Best Regards,K
Hi Ls7550,
Currently my UBA is roughly twice the PP-EU and PP-US together.
The UBA does not contain bond funds.
Also extra SHY is allocated,so:
These allocations are not fixed and not used for rebalancing. It is just what there is now.UBA PP SHY(cash)
50% 25% 25%
Hi Larry,
Browsing the conclusions from the PDF, it amazes me that these experts never know AIM!
Best Regards,K
Hi Adam,
There is a reason to use the PP as cash. Because of the 4 'independent' assets, the PP shows kind of linear growth(15% in the timeframe shown) as if it was money in a bank account. This is an idealization. In real life it has some volatility, but nevertheless shows great stability.
PP-US with a distance from the trendline 4%
The growth of a PP is an average 9%, so better than a bank account at the moment. I guess whenever bonds are above 9%, it is time to swap the PP for bonds.
Also I have two high dividend funds(amongst others): europe-IDVY and asia-IAPD:
IDVY - from 40 to 10
IAPD - from 28 to 8
The two high dividend funds need cash during 2009. This is of course an abnormal event. But I think it gives a feeling for using the PP as cash versus a high dividend fund as cash.
Best regards,K
Hi Tom,
Grats with the nice performance! Indeed it was a good year.
It is interesting to see how the ETF's are performing against a set of indices. It would be nice if we could buy the ETF that is performing the 'best' and with low costs. Also the ETF that fits the best into the 'plan'.
Yearly numbers for my UBA are not possible, because the UBA started in July 2010. The up-wave we saw this autumn was of course nice for my UBA and I imagine for everybody's UBA!
The picture in my post on Relative Strength for the PP and the UBA only describes one point in time. Th same information is in it as in a moving average graph, but with a different calculation.
When I look outside, I see a Christmas landscape.(snow etc.) Let's hope that we all have a super Christmas AIM-wise and also for all the other important things in our life.(my Christmas holiday started today !!!!) In 2011 I hope we all will have good AIM action, a continuation of what we have built up till now and even an improvement of our AIM efforts and non-AIM efforts.
I wish you and the group a good and warm holiday.
Best Regards,K
Hi Adam,
Thanks. The picture does not show my portfolio completely.
Overall it is a combination of the Ultimate Buy and Hold and a Permanent Portfolio.
The PP is kind of cash or bonds. The idea is to liquidate the PP when heavy buying happens. The position in SHY is a bit bigger to serve as extra cash, whenever the PP is down and the UltB&H is down as well. My Ult B&H has no bonds in it.
The structure of the UBA(ultimate buy and aim) is 3 tetrads for the US, the developed world and emerging markets. Each tetrad contains LCB,LCV,SCB and SCV. My graph doesn't show all funds used but they are somewhere in another post. Additionally VNQ, an europe Reit and an asia Reit is used. Maybe VNQ and VNQI will be used in the future, not sure yet.
The Merriman website is informative. Before I started this portfolio I also read the DFA website.
Best Regards,K
Hi Grabber,
Maybe of interest:
http://seekingalpha.com/article/241725-corinthian-colleges-a-contrarian-play?source=feed
Best, K
Hi Larry,
In windows 7 you have the Snipping Tool:
first press 'Start'
then press 'All Programs'
open the directory 'Accessories'
there you find the 'Snipping Tool'
Best,K
Hey Adam,
I'm converting my whole portfolio to the diversified index method with each allocation class managed by classic AIM
This looks as the same kind of 'strategy' as I use.
So my curiosity forces me to ask which allocation classes you are planning to use?
Also the initial weightings of each allocation class are of interest. My weightings at the start were all roughly the same.
Best Regards,K
Small Cap Blend
Today a sell in VB with a gain of 26%.
VBR still has a bit to go for a sell. Lately VB was a bit stronger than VBR.
Best Regards,K
Hey AIMster,
Thanks for that link. I have a few shares of PGF, they will probably get swapped for PFF. I saw that PFF does not hold exclusively financial stock, it is also not in the title describing the fund.
Thanks again, K
Average Yield to Maturity 4.22%
http://us.ishares.com/product_info/fund/overview/TLT.htm
they're now above $2000, like the $2200-2400 range
If they are for example $3500 with buying value $3000, maybe one idea is to have multiple STRs.
A STR with CV=$2000
Another STR with CV=$3000
etc.
Within a STR the CVs are all the same. Stock of which you want to hold more than $2000 could be in another STR.
STR2000, STR3000, STR5000 etc.
Best,K
Hi Praveen,
One of the STRs that I want to start is a STR with the 10 sectorfunds of Vanguard.
Let's say we start with a Constant Value of $2000, then the appropriate amount of virtual shares will be allocated to each sectorfund. On a 15% drop we can buy $300 real shares and on a sell signal we sell $300 virtual shares. To accelerate buying, we could double up the buy, spend $600 and convert $300 virtual shares.
That could be a nice way of starting up a sector based machine covering the Domestic market. We also could also use the Ishares global sector funds to cover the whole world.
Best, K
(To increase the buy and sell amounts we could also add a virtual amount to the Constant Value, this in addition to the real shares. We buy real shares, with bigger amounts than $300. We sell real shares until we don't have any left. than terminate that CV submachine. This is similar to LD-AIM. Leveraging up the trade size.)
Hi Praveen,
Having some equities around, which are not in AIM machines, I find the STR machine a nice way to organize things. Equities that were kind of seperate without a 'strategy' can now be organized by STR.
At the moment a sell or buy will happen in my STR, when the equity is 15% above or below the CV value. I have thought of using the standard deviation as threshold, but still have to look into that a bit more.
Those equities of course don't have all the right CV value. Some have a smaller CV value, others a higher CV value. For the ones that have a smaller CV value, I have added 'virtual shares'. When there is a sell, virtual shares will be sold. When a buy occurs, real shares will be bought. In this way virtual shares will gradually disappear and replaced by real shares.
For the ones that are bigger than the CV value, they will keep their current CV value. More thinking is needed about what to do with those.
The fact that my thinking is now organized by the STR concept, is already improving any planned or unplanned buy/sell decisions. It really helps to manage all the things that were not well organized before!
Best Regards,K
Hi Clive,
Nice graphs!
An AIM of the UBH would move between the two green lines of the first and the second graph. By buying low and selling high even improving on the second green line.
If you would run these examples again but switch the 5 years for the LTGB, you would get a mixture of the PP and UBH. Potentially also higher income.
Best,K
Hi Clive,
Grats with the Grub :)
Your example with the UBH makes a lot of sense to me.
At the moment my UBH has coverage of the domestic tetrad, the international tetrad and the emerging markets tetrad.
The REIT sector is represented by domestic, international-EU and international Asia.
Every element is roughly the same size.
My thinking now is that maybe Commodities should be added. DBC and others like it, all based on futures, will not be selected. My thinking was a combination of gold, silver, energy sector fund and materials sector fund. This combination could be added as one AIM machine, or several AIM machines or even a CV multiplex with for example size ratios of 5:1 for gold/silver and 2:2 for VDE/VAW. Together they could be the size of one AIM machine.
An argument against VDE/VAW is that it already is owned by the domestic tetrad. In favor is that it could be an extra emphasis on these sectors.
Another possibility is to add XME, S&P metals and mining.
Also you could say that the PP already has Gold, so UBH doesn't need the Commodities.
Something to ponder on,
Best Regards,K
Hi Clive,
The plan here is to extend, in December, my CV machine with the Dow selection of P/FCF candidates. Possibly re-balancing bands of 15%. These P/FCF sub-machines will be used for one year, then re-evaluated and replaced with the then current set of P/FCF stock.
The idea of the bottom draw is very nice! In my experience also the stuff from the bottom draw is not 100% stable and will be financially trans-mutated. As long as the quality is enhanced all things are good. The inherent profit will not disappear as long as quality holdings are used. In stead of B&H one could also for example use UBA for the bottom draw, letting AIM increase the size of it and increase its dividends. AIM is an incremental draw enhancer.
Best regards,K
B&H and deep divers.
On the AIM board these 2 issues popped up for a Constant Value machine(CV).
My first reaction to these issues:
I - When the investment price rises, CV will expand as well. Each CV(1,2,..n) could be selling, that sell will be added to Cash. At Cash + 10% a new CV will be opened: CV(n+1). CV can grow with the market.
II - For losing positions, a Quality indicator could be used. As soon as a CV(i) is below the Quality indicator that CV(i) could be swapped for a new instrument that is above Q.
A possibility for a Quality indicator could be P/FCF etc.
Best Regards,K
Hey Praveen,
Thanks for starting this board!
I have a machine which is similar to a STR. So I will be reading and hopefully contributing to this board.
Best Regards,K
Hey Clive,
Each works best against investments where the price zigzag's a lot, but will lag buy and hold when the investment price progressively rises. Each will also suffer when a deep diver or down and stay down investment in tracked as more funds would have been added into that 'losing' position.
I - When the investment price rises, CV will expand as well. Each CV(1,2,..n) could be selling, that sell will be added to Cash. At Cash + 10% a new CV will be opened: CV(n+1). CV can grow with the market.
II - For losing positions, a Quality indicator could be used. As soon as a CV(i) is below the Quality indicator that CV(i) could be swapped for a new instrument that is above Q.
A possibility for a Quality indicator could be P/FCF etc.
Best Regards,K
Hey Toofuzzy,
Thanks for bringing up TBT, this area(2X)is sort of new for me!
TBT is twice inverse TLT:
It certainly seems the right way to go looking at the TLT graph. Should have moved TLT to TBT between crossover on the price graph(mid Oct) and crossover on the RS graph(mid Sept).
I use SHY as my cash. For the PP and for AIM. My position in SHY is positive and it seems that SHY could tank, maybe a dollar or so.
SHV is more stable and maybe better now than SHY.
I have to think about using TBT for my cash position. Already the PP is part of my cash position. Don't want to take 'big' risks with cash. But I must say TBT is tempting now :)
Best Regards,K
Nice picture
SLV is a bit down from $28 today
http://www.uncommonwisdomdaily.com/silver-explodes-5-8-gold-surging-global-firestorm-raging-over-fed%E2%80%99s-600-billion-money-printing-spree-investors-rushing-to-weiss-presentation-10584?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+UncommonWisdomDaily+%28Uncommon+Wisdom%29&utm_content=Google+Reader
Hey Clive,
It is nice to see Ballmer selling 1.3 B$ worth of Microsoft stock (50 million shares) when the price is just going through the MA 200 upwards.
He has 25 million shares left that he wants to sell before this year ends.
Gated also sold $50 Million of MSFT shares, I think.
Interesting to see that MSFT price was not negatively impacted by Ballmers selling. When his shares have been sold, the MSFT price could continue upwards.
Best Regards,K
Hi Grabber,
1987 seems so long ago! Conversions happen when the world ends!
Re: your question
That is the average cost of each share in my fund.
It is also equal to the total dollar amount paid for all equities in the fund divided by the number of shares owned. I tried to start with a value of $10.
The value per share is the market value of each share, as of friday.
So if I sold all shares than the difference between market value and cost would be the net profit(tax included, which would be deducted on 01 Jan).
It is fun to run your own fund. :)
Best regards,K
Hey Clive
The PP's too steep IMO now
TLT is now on the way down.
It is interesting to see where TLT will stabilize.
In a virtual AIM machine my virtual first buy would be around 94.50
VTI and IAU are still on the way up and could continue to go up for some time?
It seems that VTI and IAU could carry the portfolio for some time.
The Top 1 and Top 2 portfolios are based on relative strength.
The Top 2 portfolio is now in VTI and IAU.
The Top 1 portfolio is now in IAU.
The Top 2 seems to be more stable than the Top 1.
Top 2 is now 7.7% ahead of PP classic and up 23.5% since Sept 2009.
The stronger the moves in VTI and IAU upwards now, the more Top 2 will surge ahead.
SHY will be the only asset when the others have RS < 1.
Best Regards,K
October 2010
1 UBA
Nice flow! Several sells executed, more to come hopefully!
2 PP
PP-EU : 16.33% since Sept 2009
PP-US : 15.82% since Sept 2009
Nice chart comparing the PP with holding the top one (Top 1) performing PP asset and the top two (Top 2) performing PP assets. Whenever the strength of an asset drops below 1, SHY will be used per definition.
3 - UBA Strength
1 DGS 1.176
2 VSS 1.175
3 VWO 1.165
4 VGK 1.153
5 DEM 1.145
6 VEU 1.145
7 VB 1.131
8 DLS 1.130
9 VNQ 1.123
10 VBR 1.119
11 VPL 1.114
12 IAU 1.111
13 VTI 1.108
14 VTV 1.084
15 SHY 1.003
16 TLT 0.971
Hey Adam,
You can split your account into 'shares'. When you take money out, you sell 'shares'. When money goes in, you buy 'shares'. You can compare the 'share' price with the SP500. It is your own Mutual Fund.
I just started doing this so I have not a lot of experience with it yet. But in excel it is easy and doesn't take any time during weekly book-keeping.
Best Regards,K
Hi Clancy,
Vanguard Short-Term Bond ETF (BSV)is an option. It is for example part of Larry Swedroe’s Big Rocks Portfolio.
Maybe a bit safer is for example SHY or SHV. Vanguard also has a short term gov-bond fund.
Lichello in chapter 17 Retirement AIM proposes a short term bond fund. He also says that everybody could use that , except for tax record keeping reasons he is still using a money market fund.
Best Regards,K
Sell
A GTC sell in IASP, ishares asia pacific property
Others are close to their sell points.
Best, K
VNQI
Vanguard now has a Global Reit ETF: VNQI. The expense ratio is 0.35% which seems nice.
A negative is that dividends are only paid annually in December. I got this information from the prospectus.
Because of the annual dividend I don't know if I will move my ishares Asia and Europe property ETFs to VNQI, even while their expense ratio is higher.(20 points or so)
I am a fan of monthly/quarterly dividends.
Best Regards,K
Thanks Toofuzzy,
That was really it! And not fuzzy at all :)
Best,K
Hi AIMster
Fully agree with you. Also execute the AIM sells and have your sell limit orders loaded!
The point I was trying to make is that now the prices levels seem highish. In stead of buying the Stock and put 50% in cash for example, leave all in cash and setup a virtual machine. When the virtual machine signals a buy then execute the buy. Doing this you buy cheaper.
Lets say you want to AIM CHY. The price is now $13.22, in stead of setting up your machine by buying now, you calculate the first AIM buy point, lets say $11.22. You then enter the limit buy order as calculated by AIM for that price. You can also increase the size of the limit buy order a bit, if you want to. I have a list of buy orders like this outstanding, if an order executes then I add the shares to a big machine(big machine can do the selling) and continue adding more cheap shares. I did this with MSFT which is now 27.06(up up up!). When you have enough stock then you can put CHY or MSFT in its own machine.
Let AIM do the buying, it is smarter than us :)
Hope this is clear?
Best Regards,K
Hi Adam,
What can i say, here in Holland taxes are way too high, the governments appetite for our money is huge. But I can't change it. This system of taxation also has advantages because you can invest where you want, the taxation of all assets is the same.
We also can put money away for retirement, which is not taxed and will be taxed when you use it in retirement.
Best Regards,K