Hello fellow investors
I’m starting playing around in ways of calculating “improved” distribution of the stocks within a Pie.
The simplest way is of course just allocated all stocks with the same %, so if you have a Pie with 20 stocks, each of them will have 5%… if you add a new stock… all stocks will have 4,76% (one probably will have 4,77% to round up 100%).
That’s easy, you can dot it using the computer’s calculator.
Some strategies that I want to play around:
1 - Calculate the allocation based on dividend yield
Given a number of stocks, it will sort them by the dividend yield and will calculate the allocation of each of them based on the overall “weight” of the yield.
2 - Variations of the strategy 1
Be able to use the current 52 week % as a parameter to give more “weight” to stocks closer to 52 week high or low.
3 - Past performance
Use the performance result of N years to distribute the stocks within a Pie.
4 - Rating based calculation (suggested by EquityInvestor)
Given a list of stocks, rated from 1 to 5, calculate the distribution based on that.
It’s mostly by curiosity, I probably will never use the raw result of this to my own Pies, but I have interest to know how will be some distributions given some different strategies.
Do you use any “data driven” strategy?
What another strategies do you think that could be interesting?
ps1: it would be available online somewhere.
ps2: I still don’t have an API to use for some of the data needed.