Hi Clive, Re: UBAHS and Optimum Cash Reserve Total...........
Yes, I've been watching this very closely. The account's heavy "income" components are producing a stream of available cash over time which is helping to keep the Buys moving along when necessary.
I agree that one of the benefits of the whole UBAHS concept is the balancing of low correlations and diversification. After all, they expected to "buy and hold" and were willing to live with that.
I believe they also were planning to have the entire holding reinvest any dividends and interest income. In my case, I've set up the account to not reinvest dividends, but let AIM collect the cash and then deploy it according to AIM's buying schedule over time. When I've done historical reviews, generally AIM "times" the purchase of shares better than Dollar Cost Averaging of dividends and interest.
Also in my case, the account accumulates the cash from several sources over time but the "most needy" along the way can tap the cash for buying. Overall, maybe the peak of a market cycle will require, as you said, only a 10% to 20% max. cash reserve. If so, the "vealie" technique may be used to a much greater degree in this new plan.
In the past, the individual sector funds I'd chosen had a very high correlation of movement initially when the bear market ended. It was only later on that the Energy sleeve sort of took off on its own trajectory. Finally the Financial sleeve had its own torture session.
I do hope some time to be able to divide up the U.S. domestic portion of the holding into separate industry sleeves, each managed as a separate AIM engine. However, that would take an account of much larger total value or the use of something like LD-AIM to spread the money around further.
Thanks for your thoughts,
Tom
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