AIM v. Momentum/Trend Following
There are quite a few papers of an academic/semi-academic nature on the Internet detailing evaluations of trend following and momentum-based investment systems for multi-asset portfolios - e.g. using 10 month moving averages to switch in, out and between asset classes, selecting the top 5 or 10 asset classes by 12 or 6 month returns, sometimes taking volatility of recent returns into account as well, usually operated on a monthly review basis.
I have found virtually nothing of the same apparent rigour about AIM. It would be good to see a 'head-to-head' comparative evaluation of the two different approaches. Quite a task, and I'm not equipped to carry it out!
The momentum and trend following approaches appear convincing, and I'm finding them rather seductive at the moment, wondering if some version of them would give me better results, and a simple-to-operate process seems easily within reach. I'd welcome any comments.
Just had an AIM-directed sale of 5.3% of Japan. Good profit - over 30% against average buy price. Once again the profit level is really due to Termvesting into the position last year. Although satisfying at the individual level, its effect on the overall portfolio is very small.
Daisy42
