a very simple investment strategy

to each his own, but still, it's hard to imagine all the folks here assign themselves property management jobs at $20/hour.... well, unless you love TDFing, that's another story.

we've been talking about DCA, which mathmatically should out perform the index... here is a strategy that will juice up the performance even more.

step 1 - decide stocks/bonds/cash allocation, nothing fancy, 110 or 100 - age = stock %, some stupid simple formula.

step 2 - once the stock% is decided, invest on weekly basis, but only buy with VIX/100*investable cash.... this will take advantage of the fear while avoiding over-commiting during complacency.

here is example - 

networth $100k, age 30, so 110-30 = 80% in stocks. let's say $50k is already in stocks, so investable cash = 80%*100k - 50k = 30k.... so on rolling weekly basis, say

week1, VIX = 15, then buy $30k*15% = $4500 worth of stocks.

week2, VIX = 20, and he got some extra cash (salary whatever), buy 20% * investable cash.

week3, ...

week4, ...

no evictions, no cleaning toilets, too much time.... auto-pilot.

this should add a couple % points to the annual performance, which is a huge deal over a few decades before retirement.

 

所有跟帖： 

• easier said than done though -noconfusion- ♂ (52 bytes) () 12/04/2012 postreply 13:20:36

• 這個strategy有個很大滴破綻 -朱哥靚- ♂ (482 bytes) () 12/04/2012 postreply 18:06:14

• lol -noconfusion- ♂ (372 bytes) () 12/05/2012 postreply 17:04:27

• Even Vix 40 is rare -朱哥靚- ♂ (40 bytes) () 12/07/2012 postreply 08:28:30