Hi Allen, Re: another use for Twinvest............
The main benefit I felt of Twinvest was that it offered the user a way to build a position plus a cash reserve. With the accumulation of a position reaching a size that was functional for using AIM, there would already be a core holding plus an appropriately sized cash reserve and one could then flip the switch from Twinvest to AIM.
Several decades ago I did exactly this with $$$ I set aside for my kids' education. When the Twinvest holdings were large enough to AIM, I started new Twinvest accumulations while AIMing the initial one(s).
However, back in the early '90s, my brother came up with the idea of "termvest" which was a relatively safe way to phase into an investment over time. Let's say we have $100K to invest but "feel" the market is way over-priced, over-bought, lost in space, etc. However, after waiting a year, we find the markets have continued upward even against our feeling. Termvest allows one to say "Well, it might be overbought now or maybe not."
In Termvest, one designates the term and frequency of investing. Let's say we think we're in at the peak of a 3 year cycle. So we set the Term to be 3 years. We can then divide the Term into any of the following: 1) three pieces, 2) twelve pieces or 3) 36 pieces. The choice is ours.
If we chose 36 pieces, we'd take the $100K and divide it by 36 (=$2777.78) and that would be the amount we'd use in the Twinvest formula. Each month the price/share would determine how much of the $2777 would be invested and how much would remain in cash. One would, at the end of 36 months, be invested appropriately and ready to flip the switch to AIM. The average cost of the shares purchased would be representative of the market's behavior over that 36 month period. If the price/share remained unchanged for the entire time, you'd be 75% invested and 25% in cash. The ratio would be somewhat different based upon the actual price history over that time.
Neither my brother or I had heard of or read Synchrovest at the time he came up with the idea of Termvest. He was a retail broker at the time and had a lot of aged clients who's fat CDs from the '80s rolling over and needed a logical way to shift those $$$ to a new investment.
