Hi Clive, Most excellent and helpful explanation. I'm beginning to see how this type of allocation works. So many moving elements it's hard to see how they all fit together.
Playing a bit with it, a 50% SCV + 40% SCInt + 10% EM returns a CAGR of 14.08 plus Maxdrawdown of 42%. Make sure to not use Log scale to get a good view of the results. This combination can be built with the latest small cap dividend ETFs of Wisdomtree for example.
the 3 year Buy & Hold Yield of Spy is almost 60%, due to its its almost "straight" line rise. Before 2011 SPY was rather highly volatile compared with the last 4+ years. Over the last 3-year period used in the Link the Annual Reuturn would have been almost 20% per year over the Invested capital.
My Demo Vortex AIM Portfolio on SPY Annual ROTAI Yield of 27,33 % as of April 30, 2015. Current Details on US$:
Start Capital = 20000 Added Capital in Stages = 30000 Current Reserve = 46031 Total investment = 7139 Weighted investment = 7447 Interest earned= 2022 (1) Share number = 100 Share price = 208,46 Share value = 20846 Trading cost = 458 Dividend = 1148 Profit Total= 13707 Profit on Equity = 11685 (Discounting interest earned on Reserve) ROTAI Yeild on alone Equity gain = 23,3% annually based on Invested not counting interest gain.
Interesting to note is the advantage AIMing over the buy and Reference Buy & Hold Case for SPY Discounting interest earning My AIM Yield as the Time Average Investment. . . as an approximate Buy & Hold Equivalent under the ROTAI Yeld Method for SPY for 4,33 years is about 3,5 % higher then the Buy * Hold for SPY over the last 3 years. OK, the Investment periods are not the same so I would have to make an adjustment for that.
(1) In July 2014 Interest rate on Reserve was changed for 2% to 1%. Currently the Bank interest in Holland is 0,9%.
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