AI
Tuesday, February 01, 2011 7:38:18 PM
Steve, if you weighted 34% GIEW and 66% into 5 year treasury's then
with yearly % gains of
5 year treasury's can be emulated using a 5 year treasury ladder i.e. equal amounts in each of 1, 2, 3, 4 and 5 year durations and each year buy another 5 year duration with the proceeds of the most recent maturing treasury. With such a treasury ladder you hold cash like risk (treasury's held until maturity so you get back the face value), 2.5 year average duration volatility, but benefit from the average of the 5 year duration yield (once held for 4+ years).
If instead of the fixed 34% weighting of GIEW holdings you adjusted the GIEW exposure more dynamically over time (something like vWave perhaps, or a sort of portfolio AIM of GIEW AIM's) then potentially the rewards might be improved further. If GIEW continues to bounce around as it has in the past, I suspect expanding and contracting exposure over time could really boost your annualised and perhaps avoid the need for any stop loss type mechanism.
That might mean fewer individual stock AIM's being held, but that needn't be a bad thing as with say only 7 instead of 21 and each being limited to buying only once per month, the maximum of total funds injected in any one month would be perhaps 7% instead of 21% assuming that 1% of total fund value amount was being bought/sold at each AIM trade signal.
Best. Clive.
with yearly % gains of
5 year treasury's can be emulated using a 5 year treasury ladder i.e. equal amounts in each of 1, 2, 3, 4 and 5 year durations and each year buy another 5 year duration with the proceeds of the most recent maturing treasury. With such a treasury ladder you hold cash like risk (treasury's held until maturity so you get back the face value), 2.5 year average duration volatility, but benefit from the average of the 5 year duration yield (once held for 4+ years).
If instead of the fixed 34% weighting of GIEW holdings you adjusted the GIEW exposure more dynamically over time (something like vWave perhaps, or a sort of portfolio AIM of GIEW AIM's) then potentially the rewards might be improved further. If GIEW continues to bounce around as it has in the past, I suspect expanding and contracting exposure over time could really boost your annualised and perhaps avoid the need for any stop loss type mechanism.
That might mean fewer individual stock AIM's being held, but that needn't be a bad thing as with say only 7 instead of 21 and each being limited to buying only once per month, the maximum of total funds injected in any one month would be perhaps 7% instead of 21% assuming that 1% of total fund value amount was being bought/sold at each AIM trade signal.
Best. Clive.
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