Portfolio rules
In my opinion, discipline is imperative to successful portfolio management. Here are the rules I use to manage my portfolio:
- 12-15 positions
- Full-size positions are as large as 15% of the portfolio
- Only starters can be allocated overweight size (+15%)
- Speculative holdings cannot be full-size positions
- Starters do not get traded and are not trimmed below 50% gains unless they are overweight
- Bench positions can become starters
- Bench positions get trimmed between 20 and 50% gains
- Specs get trimmed between 50 and 100% gains
- All positions get halved when 100% gains have been realized and remaining shares ride
- Stops are -7 to -10%