Hi TF, I learned in reading Mr. L's "Synchrovest" book that the 10,8,5,4,5,8,10 cycle wasn't his own configuration. He borrowed it from an investing pamphlet created by a brokerage house to demonstrate the benefit of Dollar Cost Averaging. He used the same sequence to show off how much better Synchrovest would do over DCA! Interesting!
If you reduce the SAFE values to 5% in this sequence you are then faced with running out of cash. If you let the account go cash negative with each cycle (Margin!) the portfolio nears $2.5MM at the end of the experiment.
The largest negative cash position was $178,000 on margin. At that moment the account was only worth $1,164,000 - two months before the end of the experiment. So, for a mere 15.5% max. debt on your holding, you could expand AIM's total return rather dramatically!
What is interesting is that if you don't allow the program to run to a negative cash balance anywhere during the experiment, then the total value at the end of the time is less than $700,000. Surely the difference between $2.5MM and $0.7MM brings about a serious interest in what the "real" borrowing costs are. At the bottom of the cycle, lack of margin means lack of opportunity.
One then has to read the headlines very carefully!
<g>
BTW, Total Return would be 24,830%
ROCAR would be 32,247%
Average amount at risk for all periods was 77.5% including those times it was over 100% invested because of margin.
Best regards, Tom
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