A.I.M. Users Bulletin Board

[OldAIMGuy]

Hi D42, Re: SynchroVest vs TwinVest...............

Something I tinkered with back when looking at Twinvest was the idea that every once in a while the Twinvest should be restarted. This would help it work better in extended bull markets of many years duration.

In my notes at the aim-users.com web site there is some discussion about this and some comments from Mr. L's book, too. Mr. L thought a new Twinvest account should be started when the investment's NAV had tripled from the start. I noted in that synthetic history the cash reserve had risen to about 50% of total when the account had tripled. The time frame was nearly pure "bull market."

So, it might make sense to restart the Twinvest additions with a new investment at that magic "triple" mark or maybe when cash hits 50%. In the example, I chose to just restart with the same mutual fund, but recalculate the Twinvest Code based on the NAV at that time.

Knowing what we know now, those 1999 values for the example would have taken quite a hit in the next decade. There were also some tremendous dividend distributions along the way. It appears that Mr. Lichello assumed we'd have the distributions reinvested automatically. After all, Twinvest was designed as an accumulation method for us to add new money on a regular basis, so cash is rarely a problem.

Whether we used the 3X or the 50% Cash as a trigger to restart/revitalize a Twinvest program, it appears that it should work. While I've read "Synchrovest" I've never actually done any modeling and never used it for actual money. I did, however, use Twinvest for $$$ we saved for our kids' educations. It worked very well and was very easy. Starting a "birth to first tuition" Twinvest for a child or grandchild has a reasonable time frame, too.

Best regards,