A week and a half have gone by since opening the portfoilo and making the first trades. You can also read about the guiding principles about how I will build the portfolio here. Obviously not much has changed, it really takes at least a month or 2 for significant time decay on the strategies we opened with, but overall the US markets haven’t had a good start of the year - with the nasdaq and S&P each down over 2%. The portfolio is down just under 0.5%, so better than the indices, but this is more because we started very conservatively more than anything else:

If the market had gone UP 2% instead of down, we also would be underperforming the market because we only opened very small positions, where our goal is to scale into being fully invested over the next 2 years, at a rate of ~$12.5k/quarter, so if the market had gone UP 2%, my porfolio probably would have gone up around 0.5%, same as it went down.

And that check about “how would the portfolio have performed if the market did the opposite of what it actually did” is very important to my investing philosophy, which the basis of is that I can’t predict the future. The reason for that is that no matter what the market ended up doing, its statistically possible that the opposite could have happened. If it went up 10%, it could also have gone down 10%. If you can predict correctly which direction the market will go in the coming X period of time, its very easy to make infinite amounts of money. The problem is that no one can actually do that with certainty, and even if there is a 90% probability of X happening, there still is the chance that the 10% chance will materialize. So that is a question I repeatedly as about investing strategies - how would they have performed if the market had done the opposite of what it actually did? And the answer doesn’t need to be accurate to the dollar, just to consider the order of magnitude of the loss in the opposite case.

And heres another snapshot of the portfolio, still only the 2 original positions we started with a week ago, still the same $1990 potential profit (+ a little bit more because of the -0.5% paper losses:

From here there isn’t anything left to do. We’re currently invested $6k, so we have another ~$6.5k to invest throughout this first quarter, where if we do get a significant downturn I would be tempted to invest slightly more than $12.5k because I’m building this portfolio for the long term, and I would see a correction as a long term buying opportunity. Currently its only a tiny down turn as you can see on the daily chart:

And really just a blip as you can see on the weekly chart:

Over the coming month I’ll check back in to see how I can add another 1-2% potential profit to the porfolio via another couple of positions.

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Portfolio first update

Portfolio launch and first trades