# Computed Pie allocation strategies đź¤–

Hello fellow investors

Iâ€™m starting playing around in ways of calculating â€śimprovedâ€ť 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%â€¦ if you add a new stockâ€¦ all stocks will have 4,76% (one probably will have 4,77% to round up 100%).

Thatâ€™s easy, you can dot it using the computerâ€™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 â€śweightâ€ť of the yield.

2 - Variations of the strategy 1
Be able to use the current 52 week % as a parameter to give more â€śweightâ€ť 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.

Itâ€™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 â€śdata drivenâ€ť strategy?

What another strategies do you think that could be interesting?

Cheers!

ps1: it would be available online somewhere.
ps2: I still donâ€™t have an API to use for some of the data needed.

3 Likes

I donâ€™t know if it is of interest to you, but I use a different system for my main pie:

1. I research each stock and I evaluate it, decide whether it is worth investing.
2. If it worth investing I give it a score from 1 to 5. Usually companies with a low score are also companies that I have researched less in depth.
3. Once I have gone through all the companies, I convert the results into a percentage weighting to 1 decimal place (accuracy of pies).
4. I adjust selected values to ensure that after the rounding the total % is equal to 100.

Note: The minimum investment has to be at least 0.5% in the current pie system. The issue is that if you have too many companies a value of 1, your minimum may be less than this.

For other pies, for example for the pie I intend to create following companies from 2 Tech ETFs, I allocated a base amount to each and a bespoke amount. The process I followed was the following:

1. Lets say for the purpose of the example that there were 50 companies that were available on T212. I allocated a base amount of 1% to each.
2. I then went through the list and I allocated a result of 0, 1, or 2 to each company based on some quick research (business model + financials + awareness).
3. I adjusted the results to make sure they added to 50 (%). This is now the â€śbespokeâ€ť percentage.
4. I then added this 50% (bespoke percentage) to the initial base percentage to have the final weighting of each stock.
1 Like

This is somehow similar to what I do as wellâ€¦ so yes, I will add another option to give a rating for all the stocks and then calculate the allocation based on that.

Thanks for the suggestion

1 Like

1 and 4 are done

1 Like

Where do you get the current forecast or the latest dividend yield from?
Is it possible to get it using Google Sheets?

Not getting from anywhere yet, Iâ€™m developing the calculation logic first, providing a cvs file with dataâ€¦ after that I will grab online data.

But probably to release a first version it may work with a csv upload only, since itâ€™s very simple to get the dividend yield on google sheets, apple numbers.

I may ask @Finki for a API key

1 Like

Let me know what you need
Sure I can provide