Creating a Powerful Portfolio Blend from Scratch – Part 3

Part 3 which is the final installment of this series focuses on fine tuning the portfolio and adding realism to the backtest results. Before we can pluck the courage up to launch into our live trading following our exciting back-test results, now comes the time to remove any bullish euphoria and focus on the reality of live trading. We do this to dampen our expectations and ensure our risk weightings are correctly applied for live conditions. This is where the brutal reality of the frictional costs of trading need to take center stage….as we inevitably incur additional costs to that anticipated from our back-tests attributed to the realities of live trading.

Creating a Powerful Portfolio Blend from Scratch – Part 2

In Part 1 of our 3 Part article titled “Creating a Powerful Blend from Scratch”, we commenced the portfolio optimization process by selecting our primary system upon which we would then apply diversification principles across instruments and asset classes to achieve a bigger bang for buck in terms of risk-weighted returns for our finite investment capital. Part 2 of this installment article focuses on how we go about this blending exercise.

Creating a Powerful Portfolio Blend from Scratch – Part 1

In my previous article which introduced you to the world of practical portfolio management, we summarized the key criteria you need to consider when creating a portfolio from scratch. This article was theoretical in nature…..but now it is time to put the theory into practice and take you on an exciting practical journey where we apply these sound principles to create a robust portfolio performer offering sustainable risk-weighted returns.