Wednesday, June 16, 2021 1:32:02 PM
With a sale in April, AIM of S&P500 real price is up to 67% cash as of the end of May 2021
I recently ran a backtest of AIM of nominal price compared to AIM of real price and measured annualised real gains to the most recent/latest date for all AIM buy time points and found that to be little different to that of AIM sell time points. In contrast the same but when using AIM of real share price did see a distinct/significant difference (improvement). Simply, AIM of real price worked better.
For the above chart to better preserve cash Buy SAFE is set to 20% whilst sell safe is 0%. Monthly reviews further helps slow cash burn. As does setting minimum trade size to 10% of Portfolio Control (or stock value) and minimum number of shares to 10%. Original cash was set to 75%.
58.8% average cash since 1871. 2.53% 100% stock annualised gain versus 1.94% for AIM. Being based on real values that assumes cash paced inflation. Excludes actual cash interest and dividends.
For 'cash' a equal three way of US stocks/10 year Treasury/Gold is a good choice for UK investors, Pound/Dollar/Global currencies, stocks/bond/commodity assets
If cash is making 5.6% annualised real then you can afford to hold relatively high levels of cash reserves and have AIM target just buying the stock dips.
Clive.
I recently ran a backtest of AIM of nominal price compared to AIM of real price and measured annualised real gains to the most recent/latest date for all AIM buy time points and found that to be little different to that of AIM sell time points. In contrast the same but when using AIM of real share price did see a distinct/significant difference (improvement). Simply, AIM of real price worked better.
For the above chart to better preserve cash Buy SAFE is set to 20% whilst sell safe is 0%. Monthly reviews further helps slow cash burn. As does setting minimum trade size to 10% of Portfolio Control (or stock value) and minimum number of shares to 10%. Original cash was set to 75%.
58.8% average cash since 1871. 2.53% 100% stock annualised gain versus 1.94% for AIM. Being based on real values that assumes cash paced inflation. Excludes actual cash interest and dividends.
For 'cash' a equal three way of US stocks/10 year Treasury/Gold is a good choice for UK investors, Pound/Dollar/Global currencies, stocks/bond/commodity assets
If cash is making 5.6% annualised real then you can afford to hold relatively high levels of cash reserves and have AIM target just buying the stock dips.
Clive.
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