Redo:)
When B&H did a buy:
buy N shares
for price P
we get Value = N*P = V(0)
this value grows with a factor g
then after time t the value V(t)= V(0)*(1+g)^t
So the more time the more value, a powerfull concept.
Now we aim:
we buy V(0)*0.5 and have Cash = C(0) = V(0)*0.5, of course Cash could be smaller when using HI AIM.
Let h be the growth of cash.
Now we get:
0.5*V(0)*(1+g)^t + C(0)*(1+h)^t + SUM{transaction gain*(1+g)^(t-txntime)}
Lets stop here and not look at cash and its growth. We see that when the sum of the transaction gains is equal to 0.5*V(t) then towards the future we are equal to B&H. We lose value from t(0) to txntime, but that is a finite value, which we will recover a bit later.
So in general AIM will be better than B&H after we recovered 0.5*V(t). If cash is performing and h is not small, we will get there even sooner.
A transaction gain is roughly 0.05*0.3*V(t)=0.015*V(t).
Then (0.5/0.015) =~ 33.
We need roughly 33 transaction pairs to get equal.
How many years is 33 transaction pairs using the SP500?
Sorry if I made some huge errors :)
K