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Re: portfolio allocation



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A good question. however keep in mind that I'm an experienced trader and
that what works for me is probably not appropriate for most. I run 80% in
what I consider to be relatively low-risk indexed mutual funds - debt and
equities. Debt allocation is switched between short term corporates and
money market and long term treasuries depending upon my interest rate
outlook. Equities are switched among special long term opportunities which
offer combination of valuation and momentum opportunities. Currently I'm
about 60% ST corporate & money market, and 40% Asia and Gold funds. I run
the other 20% in futures trading accounts which are traded aggressively
across a range of commodities intended to provide some diversification of
risk and no more than 2.5% is risked on any one trade. I can't really say
that the allocation is scientifically derived, it simply suits my comfort
level for risk and return and provides the capital I require for my trading
business. It is worth noting that for professional traders, futures trading
profits are automatically allocated 60% long term gain and 40% short term
gain for tax purposes.

Earl

----- Original Message -----
From: Ross Kovacs <rossrk@xxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Sent: Thursday, May 06, 1999 8:26 PM
Subject: Re: portfolio allocation


> The recent Earl/edilina discussion brought forward an interesting topic.
> Many new traders think that they must allocate ALL of their capital to the
> market with greatest potential gain.  Earl's comment about having part of
> his money in Asia, part in S&P, and part in other futures leads me to the
> following questions for the list.
>
> 1. What portfolio allocation are you using?
> 2. How did you decide on this allocation?
>
> I ask this question since our discussions often center on the riskiest
> tradable.  A newby may not realize that most successful traders have
several
> portfolios with different risk profiles.  Yes, I know we sometimes discuss
> portfolio alloction.  I'm asking that individual Real Traders reveal their
> actual allocations and how they were derived;  not theoretical or "what
> should be the right allocation."
>
> I'll own up for myself:
>
> 1. 20% mutual funds (LT time frame), 40% Rydex/ProFunds (ST time frame),
20%
> futures (very ST time frame)
> 2. Ashamed to admit it, but I really didn't decide on this allocation, I
> just fell into it.
>
> Anyone else willing to bare their real portfolios?
>
> Ross Kovacs
>
> rossrk@xxxxxxxxxxxxxx
>