In this case I am diversified as well pretty good, since I use the bompus ranking (it is public!) that uses a lot of different criteria
Who is only trading 3 or 5 Stocks or 10 Stocks with a big amount of Money (lets say more then 50-100k)?
Anybody here taking this Kind of risks?
Regards
Andreas
Hey All, I have currently 5 strategies that I am trading. 60 stocks all mid to large cap. Mostly defensive in nature but some energy and financial also. If I ever were to revert back to micros and small stocks I would definitely have more stocks and strategies. My problem with that is it is more work for potentially higher gain with more risk. Also all of sm cap strategies I developed in the past had their day but eventually fell apart; Not sure I want to go back to that. Now, I am thrilled to get 8-15% yearly returns with being 1/2 hedged and 30-40% in long and intermediate term bonds. I also can not resist buying bonds on margin if it stays at 1%. but if it had to to above 3% I would go back to cash for bonds and increase shorting SPY or XXX. So far this year returns have been better than that, but I do not believe healthcare can go up forever and the TLT finnaly peak long term. But since I am a quant and not a technical south sayer. I will continue on. John
Currently, I have 80% of my equities in traditional, discretionary, value-oriented stocks. Most are large caps and most are multi-year holdings. Before I found p123, 100% of my total portfolio was invested this way.
The remaining 20% is all in a 5-stock small/micro R2G that I am subscribed to. In the past, I have subscribed to various R2G’s but dropped them for various reasons.
I have 3-stock versions of my own R2G’s that I plan to start trading. I toyed with 1-stock and 2-stock models, but I decided they are too unreliable.
My long term goal is to have 50% in discretionary investing, 50% in purely mechanical p123 models, which are split across different models with low overlap, low correlation, etc.
Interesting thread… I have a total of 9 models with 56 positions. Allocation: 42% Large Cap; 35% Small Cap; 21% ETFs; remaining 2% is in a market index fund.
Slippage & position risk start to become issues if I allocate too much money to the small/micro cap area. Especially if that model has a lot of subscribers.
I can offset that a bit by having more small/micro models but they need to have low correlation between them. Otherwise, I find they have high position overlap which brings back the risk.
David
Hey all,
how do you trade your 50-100 positions, e.g. if you have to buy and sell 10 positions each on 1 day? And keeping record of all the trades, and dividends… may be a lot of work.
I have no intentions to trade more than 2-3 ports with max. 50 positions (together), and that number only if it is low turnover.
Matthias
Hello Everyone,
I agree with Matthias.
Having 10 trades across 7 or 8 ports on Monday is very time consuming. Especially when many of them gap up and the rest of the week you have to monitor them to get filled. At the same time you are trying to control slippage. I am not sure how everyone does this. This is why the majority of my books are low turn over ETF’s and leveraged ETF’s that have very low correlation. I usually run 4 different ETF strategies in a Book and supplement it with stocks. It is working very well for me. Reduces my returns but it’s a lot less work. I might have ten trades a year with ETF’s vs 10 trades every Monday and I don’t worry about slippage. I see why some people do it but it’s not for me. I think what people need to realize is active trading is a learned skill that requires a lot of dedication and effort. I’m still learning and it will take a long time. I cannot imagine 50-100 stocks across multiple books. I would not know where to begin.
Mark V.