A.I.M. Users Bulletin Board

[ls7550]

RE: AIM (of Real values) since 1871

My suspicions are that the historic Portfolio Control upward bias at around 2.5%/year real rate will continue to be a reasonable 'choice' (average) going forward as I believe many central banks specifically target that sort of inflation rate (UK targets a 2% inflation rate as I believe do both the US and Canada ???).

At/near the 2009 lows I personally struggled with cash reserve deployment. Upon getting down to around 15% cash reserves I felt torn between whether going all-in or keeping some back in anticipation of prices potentially declining lower. The vWave provided a good guide but emotions (fear) did somewhat prevail overall. Going by the cash % indicated in that AIM chart I posted earlier, I actually more closely followed that choice - purely out of luck (fear) rather than guidance - even if that wasn't the best overall choice in practice (would have been more rewarding to have gone all-in at the March/April 2009 lows).

Generally overall that AIM seems to have levelled cash reserves to appropriate levels over time, such as 70% cash reserves being indicated at the 1999 pre-dot-com crash, 1970's peak, early 1980's trough etc. Enough reasonable historical good calls to instil faith in its continued ability to make future good calls IMO.