SWS Forum

Products => SPA3 Investor => Topic started by: Graeme Reardon on 25/11/2018, 10:44:50 PM

Title: Buy after Portfolio Lighten
Post by: Graeme Reardon on 25/11/2018, 10:44:50 PM
Hi All,

Last week, due to hitting 7.5% drawdown, per my trading plan (based largely off the Public Portfolio ASX Equal Weighted Plan), I lightened each share / ETF by 33%.

However, I now have a buy signal for NAB tomorrow, and my question is, because I haven't yet reached a new peak, should a new position (such as tomorrows) be based on the 'full' position size, or 66.67% of the full position size until a new peak is met? I seem to not have this in my plan, so thought I'd check to see what the public plan would do in such an instance.

Thanks,
Graeme
Title: Re: Buy after Portfolio Lighten
Post by: Dave McCulloch on 26/11/2018, 11:08:31 AM
Hi Graeme,

You pose an interesting question.

It sounds as though you're using SPA3 Investor and have made some decisions around the portfolio actions should a certain level of draw down be experienced. This is something that is included as an example in the SWS Equal weighted public portfolio plans.

That would mean reducing it in size as per your rules by 1/3 (66.67%). The example that is provided in the EW public portfolio plan suggests that the new position sizing and that of any new positions would be maintained at that new level until the portfolio regains its pre 7.5% draw down level.

I hope that makes sense Graeme?

Regards,

David.



Title: Re: Buy after Portfolio Lighten
Post by: Graeme Reardon on 26/11/2018, 11:53:30 AM
Thanks Dave,

That to me makes the most sense too, which was good as I went ahead on the open this morning from that perspective  :biggrin:
I'll add this also to my trading plan for future reference.

Appreciate the reply.

Best,
Graeme