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How would you increase exposure coming from cash and managing a large portfolio?

Original Question: Portfolio Management(rather than individual trades): How would you increase exposure coming from cash and managing a large portfolio? ie, how to decide how many initial stocks, kept for how long before investing more, how much open risk, etc?

Answer: I try to act on early opportunistic signals to get quickly involved in a reaction rally or ensuing uptrend. I only engage with one or maybe two names to counter any FOMO. I am careful not to increase open heat (read: Open risk) too much. Then I continue to act on proper setups until I am 100% invested. I then go on an use margin mostly to add to my positions when they flash proper entry signals in the weeks/months ahead. I sometimes double my regular position size intraday with the idea to catch the take-off and then scale back before the close. I only do this in quality names and when I am able to watch the position like a hawk.

When we enter a correction I try to trim my fresh positions and thus decrease open heat even more to make sure that I don’t feel any pressure to sell my longer term multi month holdings.

Here are some rough position-size guidelines:

For a small <200k Portfolio 3-4 stocks to be 100% invested

For a 500k Portfolio you can increase this to 5-6 stocks to be 100% invested

For a >1M Portfolio one can increase this to 8 stocks. With 8 stocks you are properly shielded against single stock black swan events already. Handling 8 stocks is a major challenge.


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