Tackle Today: Portfolio Design
December 13, 2021
≈ Here are the two key steps. ≈
Traders,
Over the next week of messages, we will explore Portfolio Design and Delta Weighting. Herein lies a brief introduction to the first one.
You open an account, fund it with some dough, and now you’re sitting with a whole bunch of money in cash. Now what?
If desired, you could start throwing on trades willy-nilly. But the endgame of such a reckless process will be a portfolio full of random positions. It will lack purpose and synergy.
Here’s a better approach. And by “better,” we mean more structured and consistent. Ultimately it will give you a better chance at reaching your goals.
First, list out the investments or trading systems you want to allocate capital to. Presumably, these would be systems that you’re confident will make money over time, given your skill set. For instance, I wouldn’t allocate my hard-earned money to a day trading system unless I first proved I could make money with it. Potential investments fall into three categories: cash flow, growth, and speculation. Our Chart of the Day below provides more detail.
The systems you select could include swing trading with the S.T.E.P. Swing Trading System, Cash Flow Condors, or Covered Calls using the Tackle 25 System. Maybe you want exposure to cryptocurrencies or broad market ETFs for a more diversified and passive approach. Again, it could be a few systems or a lot, depending on the individual.
Second, consider your risk tolerance and investment objectives. Then, based on both factors, identify how much money is appropriate for each system. Generally, investors place more funds into conservative strategies and less into aggressive or riskier ones. But there’s room for personal preference here.
Complete both steps, and voila! you just designed your portfolio.
🛑 Upcoming Webinar – Portfolio Design for Beginners: How to Design your Trading & Investing Portfolio with Coach Tim Justice
Join Tackle Trading in this upcoming Trading For Beginners webinar on the basics of Portfolio Design and Delta Weighting for traders and investors alike.
Click on the button below to go to YouTube and set a reminder so you won’t miss it when Coach Tim goes LIVE.
Video of the Day: Trading Concept Check – Portfolio Design
Watch this quick video to help you make sure you understand the important concept of proper portfolio design for all of your trading and investing strategies.
Chart of the Day: Portfolio Design Wheel
Here’s a simple way to organize the various systems and strategies you use in portfolio design. How much you allocate to each one boils down to risk tolerance, objectives, and skill set.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Weekend Reports
Watch the Stock, Options, Commodity, and Forex Reports to help you prepare for the week.
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