AIM UK

[ls7550]

Hi Tom.

I've been buying in many of the equity sleeves these last two weeks.

Me also. With further buys enqueued awaiting 30 day time diversification.

cash indications are very low by historical standards.

The way cWave works is that it generally jumps between levels of around 25%, 50% and 75% cash reserves being indicated in reflection of Relative Valuation being in low risk, average risk and high risk.

Whilst RV is in low risk I can't help but feel that there is still a high probability of some potentially large declines yet to come.

Perhaps vWave and cWave are just simply saying that if larger declines do follow, then likely the subsequent recovery back up to present levels would occur within an acceptably short period of time.

During the Wall Street Crash the Dow halved, halved again and then halved yet again - however a double-up recovery from the last halving occurred quite quickly. Perhaps we're in a similar type region to that after the second halving - where prices could still halve, but then quickly recover back up again.

On that basis being low in cash wouldn't be such a bad thing. We might miss potentially better buying opportunities should further falls occur, whilst in contrast if we maintain too much cash now then we might miss a sharp recovery gain.

We've got good quality stocks over here currently priced to pay high yields. Having bought into such stock you'd not only have locked in a high income but also sizeable subsequent capital gains. Those gains may take a few years to come, but in the mean time the income serves as a sweetener whilst we wait.

Best Regards. Clive.