UNIQUE ZYX ASSET ALLOCATION
ALLOCATION TO CASH
The ZYX Allocation Model’s approach to cash allocation is unique. In addition to taking into account risks, the model also takes into account the probability of better opportunities coming along in the near future. After all investors who are fully invested can not easily take advantage of the new better opportunities.
The model strives for no cash when the probability of significant new and better opportunities becoming available in the near future is less than 60%, and it can find assets somewhere on the globe with low risk.
If the probability of significant new and better opportunities goes over 60% or low risk opportunities are not available, the model starts cash allocation. The amount of the cash increases parabolically as the probability of new better opportunities goes higher or the risks increase.