Hi Jaiml, here are some notes from one of my backtest spreadsheets :
June 2006 - Nov 2014 (8.5 years)
$3333 allocation to 50/50 SSO (2x)/SPY (1x) AIM
i.e. similar to $5000 1x stock exposure initial
10% SAFE, 10% MTS, monthly reviews
9.87% CAGR, -75.2% MaxDD, 30% Average 'Cash' (SPY) - which
implies overall 70% average in 2x, 30% in 1x for 170%
average 1x equivalent against the $3333 allocation
amount, which is similar to $5000 amount being 1.13x
leveraged.
Combined with $5000 VFISX yearly rebalanced back to 50/50
8.54% CAGR, -35.6% MaxDD
Not rebalancing at all 6.83% CAGR, -37% MaxDD
SPY B/H 7.74% CAGR -50.8% MaxDD
50/50 SPY/VFISX AIM 6.7% CAGR -46.5% MaxDD
VFISX for cash throughout, however the not rebalanced
choice could have 'cash' untouched (and locked into
potentially higher rewarding fixed term bonds)
Year to end of November 2014 was a pretty good year for cash (bonds) in the UK (broadly around +15% for the year). For the forthcoming year that implies shortening down (moving more into shorter maturity). For example one of my (best, but small) holdings is CHY that Tom introduced me to years back and that I bought during the 2009 lows and that churned out getting on for a +40% gain for the year (combination of share price, income and US$/GB£ FX gains). Longer dated Gilts (Treasury) bonds have also had a good year.
Clive.
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