Monday, February 29, 2016 4:39:26 AM
Hi K
A AIM-HI (20% cash) applied to a 1.25 times actual total investment, with Vealie set at 66% will span 82.5% to 125% stock exposure, that might generally be expected to provide comparable reward to 100% stock buy and hold, but utilise some gearing at times when prices have declined, de-gear when prices are relatively high - that potentially bolsters rewards.
If 2x fund is used for stock exposure, loaded with half the amount that would have been invested in a 1x then that will entail between 40% and 62% exposure to such a 2x fund. With 38% of total in effect always in 'cash' that cash can be invested longer term for higher reward i.e. longer dated treasury - that likely exceeds the cost of short term borrowing (as incurred by leveraged etf's). With the remainder of cash split between short term treasury and gold then when it comes to deploy 'cash' you have the choice between selling some short term treasury, gold or long dated treasury in order to add more stock exposure. One of those will have moved more opposite direction to stocks (risen).
Without AIM, something like
With AIM scaling up and down gearing/exposure (buying dips, scaling back when prices are relatively high), even better results might reasonably be expected to be achieved.
A AIM-HI (20% cash) applied to a 1.25 times actual total investment, with Vealie set at 66% will span 82.5% to 125% stock exposure, that might generally be expected to provide comparable reward to 100% stock buy and hold, but utilise some gearing at times when prices have declined, de-gear when prices are relatively high - that potentially bolsters rewards.
If 2x fund is used for stock exposure, loaded with half the amount that would have been invested in a 1x then that will entail between 40% and 62% exposure to such a 2x fund. With 38% of total in effect always in 'cash' that cash can be invested longer term for higher reward i.e. longer dated treasury - that likely exceeds the cost of short term borrowing (as incurred by leveraged etf's). With the remainder of cash split between short term treasury and gold then when it comes to deploy 'cash' you have the choice between selling some short term treasury, gold or long dated treasury in order to add more stock exposure. One of those will have moved more opposite direction to stocks (risen).
Without AIM, something like
With AIM scaling up and down gearing/exposure (buying dips, scaling back when prices are relatively high), even better results might reasonably be expected to be achieved.
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