Replies to post #29 on Systematic Investing Group (SIG)

[karw]

Hi LC,

This is the first time I post on any AIM board(started AIM in 1998 during the Asia crisis).

I am interested in investing on a regular time basis, basically because of the weekly buying kick :).

I was not too happy with TWINVEST(no selling) and implemented my own method, which is a combination of VCA and AIM, growing Portfolio Control with a weekly(inflation adjusted) amount and buying and selling around this Portfolio Control point in the usual AIM way.

That was until I read your posts on Synchrovest and downloaded your spreadsheet(which is really very nice). I see what you mean, by lowering the sell percentage to 50%, you hit the $10,000 total value in year 3, month 1. Sell percentage 30% hits the $10,000 in year 3, month 6. Amazing. That is 100 times your first $100. (Of course you continue with your regular investments, so it is not really 100 times your original investment).

I have started a Synchrovest Machine on a weekly basis in a Mutual Fund, planning to have a 30% Sell percentage. Because of Synchrovest's aggressive buying and selling I don't think you need an aggressive Fund. Basically a fund with a 10..5..10 series will do, I guess. Moderate amplitude (2x) is ok, frequency as high as possible please.

It could well be an excellent time to start Synchrovest because the market seems "lowish" and capable of spiking to the downside(which is why I use the weekly update).

Rereading Mr Lichello's(3rd edition)criticism: page 32:"But that first hurdle- the initial 100 percent rise- was an imposing one." etc. I think with the 30% Sell percentage you sell sooner and have a cash reserve sooner. Also you can borrow some money from an AIM machine :). On page 33 Mr Lichello states that he might well have underestimated Synchrovest for the average employed investor.

Thanks for your efforts in Systematic Investing, I also read your great posts on the MSN and TMF site.

Greetings, KARW

[OldAIMGuy]

Hi LC, Very interesting analysis of Synchrovest. I'd not seen the details before. I know we've talked about it (mostly you) for a long time, but I'd not been able to see how it worked before. Very clever for long term accumulation with a thrift plan.

There does remain the question of capital gain tax in taxable accounts. But like Mr. L says about AIM, he will be happy to pay the tax if someone will just give him the profits.

Have you figured a way to turn Synchrovest into something more than just an accumulation model? Can it be applied to a closed system with no incoming cash?

Best regards, Tom