I've got 10k to invest in my recently christened 'AtticFund'. I'm going to describe in a series of posts how I intend to develop this fund.
The objective of the 'AtticFund' is to build a well balanced portfolio with a target annual growth rate yet to be decided!!
As we all know the markets are pretty screwed at the moment, so I'm looking at spreading my risk across a plethora of sectors and instruments to allow me to benefit from up and down moves. I will build a fund that has growth potential over the long-term, but will also enable me to benefit from short-term price movements.
The fund can include;
1. Stocks
2. Commodities
3. Bonds
4. Indexes
5. Cash (fixed income)
I intend on having a mix of short and long positions. To start with I will use leveraged products only. I'm aware of the risk of using leverage products, but will control the risk using stops. I will need to be much more accurate with my entry points than if I was not using leverage products. I will do this by using elements of my successful trading strategy - which is based around Alexander Elders Triple Screen method of stock selection.
I will risk a maximum of 10% of the fund at any time. My maximum loss is £1,000.
I will use automatic stops. I will not guarantee my stops unless I'm investing in a highly volatile instrument.
Assuming my fund has 5 instruments to begin with, the maximum risk per position will therefore be £200 - Note: I may change the allocation of risk per instrument as I build the portfolio, but for the sake of simplicity, I'll start with an equal cash risk per instrument.
So thats the basics of the fund, there's obviously still a fair bit to do on establishing my trading plan for the fund, which I'll detail in later posts. I've been in the office again today and I'm bloody knackered, so a relatively early night is in order!!
Thanks for reading Attic Watchers!
