Over time, I’ve phased out selection of individual stocks, and focused more on asset allocation plus leverage. Here is a video from Ben Felix that helped convince me that leveraging a broad portfolio is more suitable for me to increase risk and reward, instead of stock selection which by definition narrows your portfolio:
https://www.youtube.com/watch?v=Ll3TCEz4g1k
For leverage, I use leveraged ETF’s like TQQQ (3x QQQ), UPRO (3x SP500), TMF (3x treasuries). There are no margin calls, and they are unlikely to go to zero due to circuit breakers. Even if they go to zero, that means the un-leveraged version went down 33% in one day, which means all confidence is gone and they’ll probably go to zero the next day anyways (SHTF). Generally, stocks go up over time, and leverage just means you get there faster. Even though I like something like SKYY (cloud computing), I think it is too narrow, and thus more likely to fall out of favor, and I prefer TQQQ because it is more broad and therefore more robust over time.
I personally have a bucket of money that is 50% TQQQ and 50% GBTC, rebalanced regularly. GBTC is greyscale bitcoin trust, which unfortunately P123 does not allow in models.
I have another bucket of money that is TQQQ, UPRO, TMF, GBTC, NTSX (90/60 stocks/bonds, which is 60/40 leveraged 1.5x). I don’t re-balance this one, and just contribute to what I’m bullish on.
Here’s my 50/50 TQQQ/TMF model:
https://www.portfolio123.com/app/r2g/summary?id=1596865
50/50 UPRO/TMF model:
https://www.portfolio123.com/app/r2g/summary?id=1602218
I really wish P123 will add GBTC. Bitcoin was the best performing asset of the decade. It will likely be the best performing asset of the next decade. It is more scarce than gold. It has superior stock-to-flow ratio vs gold. Every 4 years, the supply of new bitcoin gets cut in half. Imagine if the supply of new gold, or new real estate, or any other commodity, got cut in half every X years. If nothing else, it’s an excellent hedge against inflation and money printing (it has a capped supply) and has low/negative correlation with your other assets.