A.I.M. Users Bulletin Board

[ls7550]

... on second thoughts !!! ...

The stock/gold ratio at the start date was pretty low and as such it would have been more sensible to start with a relatively high stock weighting/low gold weighting. Adjusting for that (to a 25% initial gold weighting) and AIM excelled constant weighted, averaged near 40% average gold over the total period, and to more recent lagged 100% all-stock total returns by just 0.7% annualized. It did lag all-stock in the 1990's big stock up-run, but has subsequently closed down that gap.

UK FT250 is much like US small cap value and I've noticed that partners well with gold, tending to both have similar levels of volatility and a degree of multi-year low/inverse correlation. US data for SCV/gold is also noted as giving 100% Total Stock Market a good run for its money, with less risk (portfolio volatility) PV US example for the similar years. And considerably better if you adjust that PV example start date back to 1972 (the oldest data that PV has available).

Monte Carlo sim was also significantly better

MC for 60/40 SCV/gold 4% 30 year SWR and ditto for 100% Total Stock Market MC suggests differences of >99% success rate compared to 86% success rate respectively.

Indicative of how the likes of the vWave as a indicator of initial loading/weightings can make a relatively large overall difference in outcome.

Clive