3 Where to start

Unfortunately there is no easy investor curriculum to follow.* Virtually unlimited resources provide great advice, useful ideas and concrete strategies – this is dwarfed by the amount of noise, useless and very expensive information (not necessarily because it costs a lot, but because it leads to losses) out there. I find it quite problematic that, in…

4 Criteria and examples of useful strategies

My goal is to create an adaptive, diversified portfolio of asset classes, factors and strategies that yields high risk-adjusted returns.  I think of it as building a personal hedge fund to manage my own money. My investment approach is data driven, evidence based investing. There is no need to reinvent the world. A lot of…

5 Combining strategies into a diversified portfolio

The basic premise for building a diversified portfolio is that uncorrelated or – better yet – negatively correlated assets and strategies will add up to produce higher risk-adjusted returns. These returns can then be leveraged up or down to suit individual risk tolerance. Because I find it very useful, to think independently about which amount…

6 Adaptive portfolio allocation

As we have already moved well into the realm of active investing, we might as well tackle the next big no-no in the world of finance: market timing. Many studies claim it doesn’t work, but in recent years more work has appeared stating that it does.* A commonly used argument against timing is, that missing…

7 Realistic goals and expectations

It is important to put down on paper clear goals about what you expect from your investments. This will help to stay the course during rough times. Frankly this is very hard to do and always just a general estimate. It´s impossible to know what the future will bring. I try to corner the problem…

8 Avoiding mistakes

The key to let your strategies reach their full potential is to avoid as many mistakes as possible. A mistake is not a loss per se, but rather not sticking to your rules, whether that has negative consequences or not, because over the long run it will. My main fear is not that the future…

9 Writing down a plan

Finally all these elements need to be written down in a plan that is clear and easy to understand with rules that you can follow consistently. The real time performance of the portfolio, along with the process of running it, need to be recorded and analyzed in detail. Through ongoing research and experiences, the plan…

1 Introduction

This is a guide I use for my own investment approach – it comes from an individual investor´s perspective and experience. I put together a rulebook for strategic investing to serve as a guideline to create and evolve a written investment plan to manage my own money. It shows a way to integrate historically successful…