AI
Tuesday, June 09, 2020 6:27:41 AM
Presenting that last chart in my previous post as a line/bar chart looks better IMO.
Fundamentally it moved all-in after a -32% MaxDD (-32% drawdown from prior highest high i.e. first (after a series of AIM sell trades) AIM buy trade), and remained at all-in until the next AIM sell trade; And thereafter progressively reduced stock during the next Bull phase (additional AIM sell trades). Which of course means that you progressively reduce how much of the Bull run gains you capture as shares are sold/cash accumulated, but in having reduced stock exposure you also relatively reduce the losses incurred during the next dip/dive.
Would work well with something like small cap stock as the 'stock' holdings (that tends to rebound early/more-strongly following dips (tendency to see bad stocks die and are replaced with baggage free fresh/clean upstarts, whilst by comparison large cap stock indexes are still carrying 'baggage')), along with something like the Permanent Portfolio (defensive/resilient to dropping in value) as the 'cash' holdings.
So for example back at January 2020 year start 70% cash was being indicated, so if that cash was invested in the Permanent Portfolio, along with 30% in stock then the monthly granularity based Corona virus dip looked like ...
$10,000 year start portfolio value at the end of March 2020 had dipped down to $9576 (-4%), compared to all-stock dipping down to $8037 (nearly -20% down).
Clive.
Fundamentally it moved all-in after a -32% MaxDD (-32% drawdown from prior highest high i.e. first (after a series of AIM sell trades) AIM buy trade), and remained at all-in until the next AIM sell trade; And thereafter progressively reduced stock during the next Bull phase (additional AIM sell trades). Which of course means that you progressively reduce how much of the Bull run gains you capture as shares are sold/cash accumulated, but in having reduced stock exposure you also relatively reduce the losses incurred during the next dip/dive.
Would work well with something like small cap stock as the 'stock' holdings (that tends to rebound early/more-strongly following dips (tendency to see bad stocks die and are replaced with baggage free fresh/clean upstarts, whilst by comparison large cap stock indexes are still carrying 'baggage')), along with something like the Permanent Portfolio (defensive/resilient to dropping in value) as the 'cash' holdings.
So for example back at January 2020 year start 70% cash was being indicated, so if that cash was invested in the Permanent Portfolio, along with 30% in stock then the monthly granularity based Corona virus dip looked like ...
$10,000 year start portfolio value at the end of March 2020 had dipped down to $9576 (-4%), compared to all-stock dipping down to $8037 (nearly -20% down).
Clive.
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