Five Percent Stocks Portfolio May Results
First, I had to amend my April results, so take note. Not sure what the hell happened there, probably that Arthur Anderson hire I made a few years back.
In any event, I remained stubbornly in an overweight cash position in May with the average daily cash balance being $7,262.37 (of portfolio value between $11k and $12k). That skews my results for the portfolio as a whole and primarily accounts for the market creeping up to me this month. I do not add any interest drawn from that balance for the results of this portfolio. Ideally, I should be picking winners in any market, but I am not confident in picking the proper stop loss that protects me as well as gives me flexibility to absorb some volatility from my picks.
On the good side, I had seven equities hit goal and only two hit stop losses. That gives me a 78% win rate for this month. I just kept too high of a cash position to keep the entire portfolio from briskly outpacing the markets average. I remain stubbornly committed to being about 40-45% invested in equities.
Blog return: 11.6%
DJIA return: 12.8%
S&P 500 return: 11.1%
Nasdaq return: 9.7%
3 index average: 11.1%
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June 3rd, 2007 at 6:00 am
If you are looking for a means to put volatility to work in your methods then use the average true range(10) as the key. You can find the ATR(10) and then use a multiple (1, 2, 3 or even .25, .5, .75 as you see fit) as your stop loss point.
June 4th, 2007 at 8:22 am
Good idea- I am going to try this for future purchases. This definitely fits into the strategy as a simple way to set the stop loss- thanks!