Replies to post #29410 on A.I.M. Users Bulletin Board (AIMUSERS)

[SunCat]

Clive, thank you for your thorough reply. The people here are very helpful. I am trying the system with 3X ETF's and am using the PCA software. It gives you various settings so some tweaking is certainly possible.

Jim

[ls7550]

Assume AIM adds 1% p.a. volatility capture benefit on average.

We can model stock like returns using something like that shown in the following table

 
 	Stocks	Bonds	50/50	50/50 +1   67/33 +1 
 	  1.25	  1.07	  1.16	  1.17	     1.2006 
  	 1.25	 1.07 	1.16	 1.17	    1.2006 
 	0.85	1.07	0.96	0.97	   0.9326 
 	1.25	1.07	1.16	1.17	   1.2006 
 	1.25	1.07	1.16	1.17	   1.2006 
 	0.85	1.07	0.96	0.97	   0.9326 
 	1.25	1.07	1.16	1.17	   1.2006 
 	1.25	1.07	1.16	1.17	   1.2006 
 	0.85	1.07	0.96	0.97	   0.9326 
  
 CAGR	1.099	1.07	1.089	1.099	   1.1037 
 Avg	1.1167	1.07	1.093	1.103	   1.1113 
 Stdev	0.2	0	0.1	0.1	   0.134 
 

A yearly rebalanced blend of stocks and bonds (Couch Potato) might produce something like that shown in the third column.

An AIM style that averages 50/50 might produce something like the 4th column, whilst a 64/33 like AIM average might produce the 5th column results. Better than Buy-and-Hold in compound average returns (despite having a lower simple yearly average) arising out of the lower standard deviation (same or better return for less risk).

This of course is highly subjective, but I think you'll get the general idea.

Best. Clive.

PS: Ahhh! I've tried realigning the column values a few times using the update message option. But each time the changes seem to make things even worse. Given up trying!