As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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Friday, 9 August 2019

Market Timing, Cash Drag And Past Performance

Cash: "Cash drag" is a common source of performance drag in a portfolio. It refers to holding a portion of a portfolio in cash rather than investing this portion in the market.

How bad is cash drag?




















Should he be guided by his past performance to look forward?

 Best  : 12% CAGR
 Worse : 1.6% CAGR

Does cash drag and market timing a serious hit in his performance over the next 10 years?

Current with cash drag : 6% CAGR

Let see what happened when he looks back few years down the road.

Let the data and the Maths do the talking!
















2 comments:

  1. Can we look at investment this way?

    At point 10 year period, absolute profit $100,000

    Further down the road 13 year it is also $100,000

    16th year point also absolute profit $100,000.

    So what happened?

    Good, so, so or bad?

    CAGR no good?

    ReplyDelete

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