I’m looking for info about a good strategy to invest monthly. What I have in mind is something like: Sell X% of 10% of my best performing positions once a month (to take profit). And when buying, spend more on 10% of my worst performing positions (to take advantage of the discount).
I could not yet find a similar strategy that is executed once a month. Do you know about such an investment/trading strategy?
For me personally, it sounds like trying to time the market. This strategy is something I’ve not heard of, nor (in my opinion) does it seem smart.
I just don’t see the gain. If you have an amount set aside in your monthly budget to invest, just put that in to catch the peaks and troughs over a long period of time.
In summary, there may be a reason you’ve not seen a strategy like this.
Agree with Joe bloggs. Most people can’t time the market, so if you are looking for long term gains, take a long term view.
The vast majority of people lose money with such a short-term horizon strategy. Pick stocks that are long term winners and keep adding when you find them cheap.
What if one bases the monthly strategy on buying/selling on a particular day of the month, and on assessing best/worst performers on the last, say, 90 or 180 days?
What if your best performers have a good run for 2-3 years or more, but you’ve been topping up your worst performers more each month expecting them to rebound?
If I were to build a bigger portfolio, I would construct a strategy based on market/segment weighting’s. Set yourself a tolerance when to top slice and so on. As in your portfolio becomes overly unbalanced to one stock/sector.
I think it’s just too much of a short time frame. The strategy you’re talking about is something that people may do a portfolio review, annually or every five years etc. I only hold 5 individual stocks right now, and my strategy is extremely simple, it’s just do nothing for a long period of time.
As they say, the most profitable investors are investors that actually have forgotten that they have an account. To put this in context, I would suggest that this doesn’t refer to meme stocks, or pre rev companies etc.
You’re also exposing yourself to additional FX fees and spread differences?
Here’s an idea, make a spread sheet and do some form of back test?
Unless you believe in your own strategy, go 90% Global equity fund/etf, and 10% play money. That way you only risk 10%. If you have found a better strategy than anyone else out there, your 10% will soon catch up in time.