Allocation is best done in parts. Ideally, every time a stock hits a new high, its a buying opportunity. I personally do not try to catch the support or bottom.
Yes that's right. Depending on how aggressive/conservative one wants to be, one can also look to split initial capital in parts, with some allocation immediately and then incremental allocations with new highs.
Hi Ankush, One question here. What would be the value adddition in this portfolio compare to momentum investing. What is the stoploss threshold for overall portfolio & individual stock. And, how frequently are you going to refine the portfolio, since it is common case in momentum investing. Some hindsight here for me, I remembered January 2018 and all are started flying with new narriative & theme. We have to ride carefully on Trendz portfolio. Thanks for sharing your thoughts. I liked the non-linearity & optionality post and your writings is content & clear. Regards, Hari
Hi Hari, So momentum investing is about buying the fastest moving stocks right. Here, I am not looking to buy the fastest moving stocks and which is why you might not see Adani Stocks or Metal stocks etc in the portfolio above.
Here the portfolio would comprise of stocks which are in strong trend based on their price charts. It would be hard to define a strong trend in words; charting is more of an art than an exact science, most people would see the same chart and come to a different conclusion. But having seen so many strong stock trends, i know what i am looking for. To put it simply- stocks moving into new highs.
In terms of stoploss, there is no particular stoploss threshold, but there are tight risk management rules in place which allows for riding the trend and limit drawdowns at the portfolio levels. With 15 stocks, overall portfolio is well diversified and so overall portfolio drawdown due to a one-off large drawdown on a particular stock would be limited.
In terms of frequency, it all depends on how individual stocks are performing. Only when one stock is exited, a new stock will enter. And unlike momentum investing wherein one looks to rebalance say every X period based on new strength of stocks, in trend investing one typically rides the trend till the very end, little slowdown in trend is not really an exit in Trend Investing.
Hi Ankush,
Question regarding whether to buy all 15 stocks right away or wait for better levels especially one like TIPS India Ltd.
It's clearly on a downtrend and not sure if it's found support right now.
There may be a few which have run up a lot only in the past week.
What's your take on when to enter these stocks.
Thanks
Allocation is best done in parts. Ideally, every time a stock hits a new high, its a buying opportunity. I personally do not try to catch the support or bottom.
So as we start now, we just buy all 15 stocks with the capital meant for this portfolio with equal distribution.
Then add more into each stock as and when it hits hew highs which just confirms the trend continuing.
Right understanding?
Yes that's right. Depending on how aggressive/conservative one wants to be, one can also look to split initial capital in parts, with some allocation immediately and then incremental allocations with new highs.
Hi Ankush, One question here. What would be the value adddition in this portfolio compare to momentum investing. What is the stoploss threshold for overall portfolio & individual stock. And, how frequently are you going to refine the portfolio, since it is common case in momentum investing. Some hindsight here for me, I remembered January 2018 and all are started flying with new narriative & theme. We have to ride carefully on Trendz portfolio. Thanks for sharing your thoughts. I liked the non-linearity & optionality post and your writings is content & clear. Regards, Hari
Hi Hari, So momentum investing is about buying the fastest moving stocks right. Here, I am not looking to buy the fastest moving stocks and which is why you might not see Adani Stocks or Metal stocks etc in the portfolio above.
Here the portfolio would comprise of stocks which are in strong trend based on their price charts. It would be hard to define a strong trend in words; charting is more of an art than an exact science, most people would see the same chart and come to a different conclusion. But having seen so many strong stock trends, i know what i am looking for. To put it simply- stocks moving into new highs.
In terms of stoploss, there is no particular stoploss threshold, but there are tight risk management rules in place which allows for riding the trend and limit drawdowns at the portfolio levels. With 15 stocks, overall portfolio is well diversified and so overall portfolio drawdown due to a one-off large drawdown on a particular stock would be limited.
In terms of frequency, it all depends on how individual stocks are performing. Only when one stock is exited, a new stock will enter. And unlike momentum investing wherein one looks to rebalance say every X period based on new strength of stocks, in trend investing one typically rides the trend till the very end, little slowdown in trend is not really an exit in Trend Investing.
Hope this clarifies.
Looking forward to ride this portfolio with you Ankush.