VORTEX AIMing

[ls7550]

Hi Toofuzzy

Am I Aiming the TLT or the gold? Am I using the gold as CASH?

As cash.

Cash will ideally preserve its purchase power so when it comes to spending that cash - such as buying shares - the value is intact.

An AIM investor who has their cash reserves stuffed into a mattress risks losing purchase power.

T-Bills might do ok at preserving purchase power

A Bridgewater 'Safe' portfolio tends to be better (comprised of 10% gold, 20% T-Bonds, 30% T-Bills, 40% inflation bonds).

Across 2008 for instance $10,000 in T-Bills ended the year with $10,671. BW Safe ended the year with $11,209 to $11,584 depending upon whether you held the 20% allocation to T-Bonds in shorter or longer dated respectively.

If as a simple example each AIM traded $1000 amounts, and reviewed once each year, at year end 2008 the AIM investor with cash in T-Bills could have met 10.6 AIM buy trades, whilst had cash been 'deposited' into BW Safe they'd have had enough to make 11.6 AIM buy trades.

Clive.