Tom...On the Test Proposal,
You are correct with the 50/50 cash equity ratio. The 5% I mentioned is to compare the 20 000 investment in a bank account. Roughly this would earn about 1600 on interest on the 20000. The 21600 end-capital is simply a reference.
There are reasons for arguing that this is not a good way of comparing an investment, as there are better ways of putting the cash away than savings accounts.In this test the reference investment is actually not important at all, but as a creature of habit I have simply included it. It is an effective tool for people that are used to bank account "investing".
Now that you have raised the question, the yield of the cash in the AIM should also earn interest while it is not invested. I have not yet build that into my excel test model. In the Vortex AIM this is done, but for this quick Test I need to calculate the interest earned from the cash in the AIM.
Do you agree that the 5% weekly compounding is acceptable for the cash portion of the Test AIM?
Conrad
