≈ Another song, another mile. ≈
No time left now for shame, horizon behind me, no more pain.
Windswept stars blink and smile, another song, another mile.
Blame it on the scars of the wars we have fought. Blame it on the declining hormone levels. Whatever the case is, we become older and wiser at the same time. We forego expediency and start the search for meaning.
Money comes along in that journey. We begin caring about leaving something behind for our heirs. We let go the details of the leaves and start watching the forest.
When young we only care about aggressive ROIs. We’ve got to trade leveraged and aim high. Nothing to lose, right?
As we grow older, we think about the portfolio as a whole. Positions are just that, positions. Run the rules, analyze, trade, exit, profit, lose. The overall composition of the portfolio matters much more.
If you are investing in a weak or exotic currency you have to double your watch. You buy a stronger currency. What if the strong currency fails? You buy gold.
You invest a precious amount of time in designing the portfolio. You think about allocation between bonds, stocks, properties, strong currency, metals, and protective puts. You separate speculation from cash flow and hedge, all connected inside a monstrous spreadsheet. If the whole portfolio, once consolidated, is becoming wealthier and wealthier then you start welcoming your wisdom.
Sun is cold and rain is hard.
I know, been that way for all my time.
Chart of the Day
Portfolio Design: Current vs. Ideal Allocation
(a fictitious example)
Don’t wait until you are gray and wise. One of the first things you can do as a trader is designing your portfolio. Group the strategies you feel most confident in trading and define the ideal capital allocation for each one. The chart above—a fictitious example—compares the current capital allocation against the ideal one inside the four major groups of strategies for that particular trader. This is a simple chart you can easily develop from the spreadsheets made available by the Coaches at Tackle Trading.
Video of the Day
Options 201: Portfolio design
Coach Tim goes over the basics of portfolio design.
Today’s Lineup
Tales of a Technician
Price Drives the Narrative
On Monday global markets skyrocketed. That was the effect. Now, we need a cause. The meeting between President Trump and Chinese President Xi Jinping ended with a 90-day cease-fire agreement to the ongoing trade war. Sounds like a pretty big deal. So, yeah, why not? Let’s call that the cause.
Traders Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode where Coach Matt and Coach Noah talked about Triggering or would like to watch it again, check it out here.
TACKLE 25 Master Mind Group 8:30PM EST
Join and learn how to better use the Covered Call System with the Tackle 25 with Coach Noah Davidson.
Trading Justice Podcast Episode 298: Growth vs Value Investing
Today on episode 298 of the Trading Justice podcast your hosts Matt and Tim discuss the time-tested concept of value investing. Many of the “all-stars” of value investing are discussed along with a discussion on how value investing differs from growth investing.
