A.I.M. Users Bulletin Board

[ls7550]

TooFuzzy

Especially since cash doesnt pay anything now.

Ray

That is a very interesting concept....re-balancing between leveraged and non-leveraged.

Gives me something to ponder about these next few days and weeks.

If you started a virtual AIM on in June 2006 on SPY close price with 10% Min Trade Size and normal settings, and simply ignored any sell trades until buy trades occurred and bought SSO (2x SPY) in the amount that AIM indicated to buy of 1x, and subsequently sold SSO to the amount of 1x that the AIM indicated, you'd have traded something like (assuming monthly reviews) AIM $ amounts of (based on $5000 initial virtual AIM stock value)

date, $amount (negative is sell)
2008-10-01 815.80
2008-11-03 680.03
2009-01-02 713.29
2009-02-02 910.59
2009-11-02 -978.38
2010-12-01 -1055.25
2012-03-01 -903.78
2013-03-01 -839.42
2013-10-01 -894.75
2014-06-02 -843.34


So you'd have deployed a collective total amount of

815.80
1495.83
2209.12
3119.71 << at the peak of buying $2725 remained left in SHY
2141.34
1086.08
182.30
-657.12 << i.e. original total invested returned and more
-1551.87
-2395.21

and have in effect received $2395 more back than invested, whilst still holding 96 SSO shares that (with 2:1 split adjusted) had a recent value of $12,761. i.e. with 2:1 split adjustment you'd hold 192 SSO shares at the recent $66.48 SSO share price)

Assuming you started with $5000 in cash (SHY) collected interest (dividends) and deployed some of that cash as above/later replenished, then you'd recently have around $8526 invested in SHY, coupled with 96 SSO shares that had more recently 2:1 split valued at $12,761 for a total of $21,288. Equivalent to a 17.12% annualised on the total original $5000 investment back in 2006.

Some of Cash deployed between October 2008 and that all having been returned (plus more) by March 2013. Over the same June 2006 onwards period SPY has total returned a 7.7% annualised and SHY 2.4% ($5000 in SHY would have risen to $6222).

The 1x AIM based trade signals (dates/amounts) indicated trades of

date, SSO share price, # Shares traded (-ve = sell)
2008-10-01 15.31 53.27
2008-11-03 12.71 53.49
2009-01-02 10.51 67.86
2009-02-02 8.29 109.80
2009-11-02 17.88 -54.73
2010-12-01 23.50 -44.90
2012-03-01 28.77 -31.42
2013-03-01 36.16 -23.21
2013-10-01 45.82 -19.53
2014-06-02 57.58 -14.65

Clive