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karw

02/08/15 3:18 PM

#39077 RE: OldAIMGuy #39075

Trend Capture

My US$ vs Euro has a sell signal now. The last sell signal was in June 2010 when the euro hit 1.19/1.20 vs the dollar. Now the euro is at 1.13 vs the dollar or 0.88 dollar vs the euro.

Will move some dollars back to the eurozone.

Nice way to manage dollar exposure.

Best, K
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bca2737

02/10/15 7:04 PM

#39081 RE: OldAIMGuy #39075

Speaking of Trend capture, this comes to mind
http://mebfaber.com/timing-model/

regards
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SFSecurity

02/17/15 6:44 PM

#39087 RE: OldAIMGuy #39075

Hi Tom, Thanks for your thoughts, but what I was really trying to figure out was where a reasonable entry point would be for what. Sorry about using volatility instead of trend, but I think of them as closely related, especially for ETFs which tend to have a narrower range and perhaps a slower trend line.

For cash positions it makes more sense to have a low volatility (beta) position so as to not lose much over time, so this also seems to be a position, like SPFF with a 52 week range of about 6% and an income a bit over 6.5%. (PFF is similar), is the right type of choice. It seems to me that this low 52 week volatility translates into a slow moving trend line.

For portfolio positions it seems one wants a higher beta (volatility) position to be able to catch the trend moves over a shorter time period, but not so volatile that there is a high risk of losing your shirt on the way down. This is where the LD-AIM model seems to help as you have less at risk in real dollar terms. Orcroft's delayed buy also helps. Now trying to figure out how to model the two together is the problem.

All I can say is that I am beginning to understand why most people are almost clueless about money management and truly planning for the future. It is a job that requires real effort and if you fail to put the required effort into it you will get bit in the ass.

Best,

Allen