| From: OldAIMGuy | 8/22/2024 8:58:21 AM | | | | | | Re: AIM and Gold.....................................
What's the appropriate level of Cash to hold in an AIM Engine designed around Gold?
Looking back at the last 25 years we see gold has had drawdowns of at least 20% six times. Some of those drawdowns were in the 30% to 50% range. Thinking of how the Buy side of AIM works, with relatively standard settings one would need a 30% to 50% cash reserve near peaks to be able to buy with AIM signals all the way down these slides.
I don't feel the v-Wave or the MRI relate to gold, so letting AIM seek its own level of cash might be best. But, if you still like the idea of capping max cash, you could use 'vealies' at some cash percentage. Maybe 30%, 40% or 50% would keep this engine in tune and offer some comfort.
schrts.co
Note the "Accumulation" pressure on IAU since around the start of 2020 (bottom of graph image). This might be symptomatic of the last 4 year's inflation. IAU shares rose roughly 50% over that time frame.
Holding 50% IAU (no yield) and 50% MMFs (5% yield) would render an approximate annual yield of 2.5% for the entire engine while idling. So, maybe a cap at 50% cash (then vealies) would make some sense.
Best wishes,
OAG
Buy from the Scared; Sell to the Greedy..... |
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| From: OldAIMGuy | 8/30/2024 12:27:27 PM | | | | | | Re: AIM Cash Reserve levels....................
My U.S. Sector ETF portfolio was started at the end of May in 2009. It started at 8% Cash Reserve. Here's the cash track record as of the 1st of the year each year since:
| Year Start | Start Cash Reserve | Previous Year Gain | | 2010 | 26% | +24.6% | | 2011 | 12% | +17.2% | | 2012 | 13% | - 0.7% | | 2013 | 21% | +13.2% | | 2014 | 30% | +24.6% | | 2015 | 27% | + 3.2% | | 2016 | 27% | - 5.2% | | 2017 | 17% | + 9.9% | | 2018 | 21% | +16.2% | | 2019 | 15% | - 5.9% | | 2020 | 14% | +25.2% | | 2021 | 21% | +13.6% | | 2022 | 18% | +15.4% | | 2023 | 10% | -11.6% | | 2024 | 12% | +16.2% | | To Date | 16% | +11.0% |
A surprise here is the low cash at the start of the Covid Year and yet there was a portfolio gain by the start of 2021 of 13.6%, even with all that thrashing. Cash was spent down to just 10% of that portfolio by April of that year but was back up to 21% by the end of 2000.
2022 was a sour year for performance, down nearly 12% at the end. Starting cash of 18% was drawn down to just 10% by year's end. The work of rebuilding the cash reserve levels continues with a sale this AM in the Healthcare Sector. Overall, my cash reserve levels have been lower than the v-Wave and the MRI suggested levels. Like Dire Straits said, "If you want to run Cool, you got to run on Heavy, Heavy Fuel."
youtube.com
I've not subjected this account to regular withdrawals for living expenses so far. I did take out 5.5% of value at the end of 2000, however.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
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| From: OldAIMGuy | 9/23/2024 10:28:45 AM | | | | | | v-Wave Market Risk indicator shows longer term diversified investments should be starting with around 34% cash held in reserve.
For comparison, here's my Market Risk Indicator (MRI) X-ray of market risk:
The MRI is showing 33% suggested cash - not much different from what the v-Wave is indicating for diversified investments. Neither is saying it's a bargain right now.
Best wishes,
OAG |
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| To: OldAIMGuy who wrote (18861) | 9/23/2024 10:31:17 AM | | From: OldAIMGuy | | | | One more item for this week's review. It's the long term "success rate" of the MRI for 38 years.
Neither the bullish or bearish signals were perfect in their calls but both were quite a bit better than the flip of a coin.
Best wishes,
OAG |
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| From: OldAIMGuy | 11/6/2024 11:23:53 AM | | | | | | These results were through the end of October - Not including the election results!
International ETF Portfolio
(21% Cash held in Reserve)
US Domestic ETF Portfolio
(16% Cash held in Reserve)
10 Stock "Sandbox" Portfolio
(20% Cash held in Reserve)
Retirement Account Built with Twinvest thru 2023, now managed with AIM
(19% Cash held in reserve)
These accounts were mostly flat for October but cash grew in some cases. All in all, 2024 has been a good year for these accounts.
Best wishes,
OAG
Buy from the Scared; Sell to the Greedy..... |
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| From: OldAIMGuy | 11/18/2024 8:38:03 AM | | | | | | You may have noted a bit less enthusiasm from investors last week. As mentioned here, the markets seemed to have been caught up in "too much, too fast" in their assessment of future gains. The four components of the SignalPoint Market Risk Indicator all rose in risk assessment with three now showing Caution as their signal. Here's how they look as of last Friday's close:
(A significant spike in speculative activity coincides with the inrush of capital)
(Confusion as to the markets' next direction shows here with very high Divergence)
(Stock Valuations have been in the Caution range for essentially all of 2024)
Summarizing all this cautionary signaling in the SignalPoint MRI, we see it rise two points to 37% suggested cash being held in reserve indicating 63% invested. The MRI "Oscillator" shows a very strong upward risk pressure of +10.
(The tail up end takes the MRI to the highest level in 2024 and the highest since early in 2022)
We see correlation in the v-Wave as well:
(while not as strong an up-tick as we see in the MRI, the v-Wave is also in the "nervous" range)
Keep some MAALOX handy, we'll let these risky times pass.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
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| From: OldAIMGuy | 11/25/2024 12:09:39 PM | | | | | | Some earnings reports and some flattening of the S&P500's upward movement helped to contain market risk as we head into Thanksgiving Weekend. SignalPoint's MRI comes in up one point at 38 with an Oscillator of +4. The Oscillator suggests there's still upward risk pressure while the MRI itself is well into its Caution range.
From Value Line's "Appreciation Potential" we derive the v-Wave risk indicator. It shows 34 for the 3-5 year outlook, down a point from last week but still in its own Caution range.
There's a cumulative effect of these indicators being in the Caution range. It's best shown in a histogram such as this:
In this image we see the long trend of below median v-Wave while markets were down or flat being followed by nearly a full year of it being now above the median value and the extraordinary rise of the three indexes. Data from 1982 to Present show that these long trends should be heeded as being bullish or bearish. Think of accumulating risk as wear and tear on an investment machine. At 12 months above median risk, this machine is ready for a rebuild. Market Drivers aren't ready to pull into the Pits for maintenance at this point. Let's hope they're watching their temperature and oil pressure gauges!
As for my own activities, I've been following my Motto: "Buy from the Scared, Sell to the Greedy!" There has been a heavy emphasis on securing incremental sales of stock and fund inventories in recent months.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
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| From: OldAIMGuy | 12/4/2024 9:09:31 AM | | | | | | November proved to be a pretty good month for my Equity Warehouse - at least the Domestic U.S. portion. Here's the results through the 1st 11 months:
International Style ETFs
(21% Cash in Reserve)
Domestic U.S. Sector ETFs
(17% Cash in Reserve)
10 Common Stocks Composite
(17% Cash in Reserve)
Simple Growth ETF AIM Portfolio
(19% Cash in Reserve)
Growth in value in the domestic portfolios was enough for some AIM directed selling and almost enough to keep Cash growing at the same rate as the overall portfolio. For instance, the simple Growth ETF portfolio grew 5.9% for the month of November and the cash held in reserve stayed at 19%. The big exception was the Sandbox portfolio which grew 11.4% during the month but the cash dropped in percentage from 20% to 17%. That was partly because there was both AIM directed buying and selling in that portfolio occurring during the month.
Now there's just a month to finish for Year 2024.
AIM for Portfolio Management,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
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