| | | More from AIM user Clive..............................
Hi Tom,
AIM of S&P500 real price, Monthly reviews, 10% SAFE, no Minimum Trade Size, Buy even if cash moves negative (set cash to zero) (so starts selling again sooner after deep dives) i.e. a only on-paper-AIM that is used to identify a appropriate stock/cash weighting to rebalance to once/year, as of the end of July was indicating 58.6% cash, reducing down from former higher levels
That's still significantly higher that other markets i.e. Covid, wars etc. has seen a flight to US safety, and risks that when greed returns/fear subsides that capital may outflight the US for 'better value' elsewhere
Realigning once/calendar year the actual portfolio to the on-paper-AIM stock/cash weightings indicated values at that time ...
Achieved similar total returns whilst having averaged 40% to 50% cash. If/when cash earns > cash then any value added there obviously adds to total returns
AIM did a great job of scaling stock exposure down/up as stocks rose strongly (too fast)/declined
Clive
------------------------------------------------------------------------------------------------------------------------------------
...and my Reply:
Good day Clive, Re: AIM Performance against a broad index...................
AIM's performance compared to the S&P 500 (inflation adjusted?) and used as a cash cow is quite good. Consider that most professional money managers at mutual funds don't achieve equity with the index makes the AIM results all the more pronounced. Many investors talk of beating the "market" as a goal. Considering how hard it is to just match the market, they may be setting their goal too high. Matching the S&P Index with significantly less principle at risk seems to be a quite satisfactory achievement.
One of the reasons I came up with the R.O.C.A.R. idea (Return On average Capital at Risk) was to highlight AIM's risk adjusted return over time. In your example, to have achieved near parity with the S&P 500 Index over decades while having only around 60% of the average risk exposure seems a far better outcome than essentially all mutual funds. Fund managers might achieve better returns once in a while, but there aren't any that have been consistently that good. And, they've had to risk essentially all the capital to achieve their infrequent successful outcomes.
Thanks again for highlighting AIM's strengths over time.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
|
