Question:<\/p>\n
What percentage of the entire portfolio does each position represent?<\/p>\n
My Response:<\/p>\n
Typically, each pick will represent anywhere from 5 – 15% of the portfolio, depending on the state of the market, the stock being purchased, if its purchased at the pivot or off of support, etc.. Currently, a standard allocation is $15K. Positions that I consider core holdings such as a Google or an Apple might get 20K while lower priced, higher volatility positions might get $7500. I always make smaller purchases in a shaky market and for purchases off the 50 day moving average. These positions typically are $10K. Of course as the portfolio grows these sizes will increase. On average I probably hold somewhere around 10 positions which offers a nice blend of growth and diversification. In order to provide a Model Portfolio that is more realistic I’ll be working to implement the ability to use margin, include commission fees, etc. [update: this was included for 2006 when I used 10% of available margin] I hope to have this done some time this January. Leveraging with margin is an important tool in a rising market and can really accelerate gains. Good question.. thanks.<\/p>\n","protected":false},"excerpt":{"rendered":"
Question: What percentage of the entire portfolio does each position represent? My Response: Typically, each pick will represent anywhere from 5 – 15% of the portfolio, depending on the state of the market, the stock being purchased, if its purchased at the pivot or off of support, etc.. Currently, a standard allocation is $15K. Positions … Continue reading Portfolio Position Sizing<\/span>