My StockRanks £20k Portfolio 2 years on (Part 2) - The Rebalancing

Tuesday, Nov 01 2016 by
25

Introduction

My StockRanks £20k Portfolio 2 year on (Part 2) - The Rebalancing is part of a series of posts about adopting the Stockopedia StockRanks system into a real money test portfolio.  With a starting balance of £20, 000 I wanted to test the system over a number of  years.  After an undetermined period of time and if I become more comfortable with my rules set, it is my aim to completely adopt a StockRanks system into my discretionary portfolio.

I have now completed my second year of the journey now ready to rebalance the portfolio. The results of the second year can be found here.

My StockRanks £20k Portfolio 2 years on (Part 1) - Results

At the bottom of the page is links providing a history of the journey so far.

My Rules

Here is a recap of the rules.

  1. The Stockopedia QVM Recipe (Quality > 66, Value > 66, Momentum > 66)
  2. Dividend Yield 12 month rolling > 0
  3. Market Cap > £20m
  4. Spread (bps) < 500
  5. Sector includes - One screener for each sector (10 sectors in total)
  6. Rebalance every 12 months

I will try to pick stocks that have the Rank 90 or above and quoted in GBP.

While I try my best to balance over all sectors I may reserve the right to ignore a sector or adding a more stocks a single sector should I feel this is appropriate.  This may be due to no stocks qualifying in any particular sector and I wish to keep around 10 stocks invested.

Exit Plan

A stock will leave the portfolio when it goes below StockRank 90 and a more suitable qualifying stock can take its place. Once the Stock is part of the portfolio the Quality, Value or Momentum figures may go below 66. That is ok as long as the Stock remains above 90 at the time of rebalancing

Stop Loss

During the past two years I have felt uncomfortable with not having a stop loss plan integrated into this portfolio.   A stop loss is integral throughout all my investing strategies and placing a stop loss is a system that works for me and one that I do trust.  I can leave all my portfolios when I work offshore with the comfort that they do not need constantly monitored and stop losses protect me during these period of absences..  I want a reasonable exit…

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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2 Posts on this Thread show/hide all

rhomboid1 1st Nov '16 1 of 2
4

Hi Ian
I enjoyed reading that very much, mainly because it is the opposite of what I try and do!

For instance I'm happy to run a very skewed portfolio, e.g. no financials and c.45% industrials, I also have no stop loss as I tend to buy low p/e cash rich divi payers that are inherently less volatile and emotionally driven as adrenaline junkies buy other stuff. I sell when my original buy thesis falls apart in a bad way by RNS or analyst presentation.

Position sizes for me are a moving feast as well varying from 0.2% of portfolio to 16%.

What I love is that you're doing your thing in real time & publicly and creating a permanent record.

Thanks & good luck

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Grindertrader 1st Nov '16 2 of 2
3

Hi r,

Thanks for the kind comments. It sounds like you have a good plan in place and of course if it works for you that's great. I am very much a medium to long term trader/investor. While I pick my stocks based on fundamentals I used charts and ultimately stop losses my preferred method of protection. This does mean that while I could pick a stock that in theory that could be held for years, I use charts to determine a reasonable entry point and stop losses as a protection against any over confidence that could blind my choices. I enjoy stock picking but as the years go on I want to find a method that gives me some control but allows me to spend less time on the computer and to force my lazy ass into something more active.

I hope finding a decent set of rules based on the StockRanks system will allow that to happen. It might take a few years to fine tune my rules but I am enjoying the process.

I decided to make the process public as a way to discipline myself and stick to the plan. I was also surprised by the interest of this portfolio when I first declared it on the Stockopedia forums. I also decided that £20K would be a good starting point and segregated this money from my main holdings into a separate account. £

Thanks again and good luck with your investing.

best wishes Ian

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