>>> On the other hand, I have 63 positions and I am having a hard time managing them daily. I wonder how others position themselves ? <<<
Wow! I can't imagine owning that many positions at once.
Position sizing, in my opinion, is one the most important ingredients to a successful portfolio. If the position is too large, and you're wrong, it could take away months of profits. If the position is too small, and you are right, it may not have enough of an impact to allow you to outperform the markets over time.
In my own case, I put 10% of the portfolio into each trade. Needless to say, 10 trades on at the same time and I'm 100% invested.
I used to have a Series 7 license. At the time, I did a study of the various investment styles the fund managers were using. Some of the more profitable funds over time were the "focus" funds. These funds often didn't have more than 20 stocks at any one time. The thinking behind the strategy was that it is very hard to find 20 good ideas, 50 is nearly impossible. So, if the manager of a focus fund wanted to add a position, they had to delete one. They only wanted to invest in their very best ideas and to insure that, they would limit the number of holdings they could have at any one time. Then they would buy a large enough position of their very best ideas and over time, outperformed most other styles of investing.
I can't imagine keeping up with 63 at the same time.
dabum |
