Your ideal portfolio 2022 | Investor place

How to design the right investment plan… specific actions to take today… prepare for whatever the market brings

Happy 2022, great coward!

In fact, this only concerns 43% of you. The rest of you are amazing.

Let me provide a brief background before canceling your Digest subscription…

Research shows that 43% of people expect to give up on their New Year’s resolutions this year. In fact, this 43% rate of “quits” should start by February.

Not too encouraging.

I guess the results are just as bad, if not worse, when it comes to New Years investment resolutions. And that is if such resolutions are made in the first place.

Why are most investment resolutions particularly flawed?

Well, one of the main reasons is that most of the goals associated with an investment resolution are binary.

“Did I beat the market? “

“Did I earn 15% on my portfolio?” “

“Did my investments generate enough cash to cover the down payment on the new home? “

These are all reasonable goals, but they focus exclusively on the outcome rather than a process – the “reward” rather than the “playbook”.

The truth? The only thing we can control is the process.

Think about it. A myriad of influences will impact your feedback in 2022 …

Inflation, rising interest rates, the evolution of the pandemic, speed of resolution of supply chain problems, technological advances, new legislation, geopolitical conflicts, the list goes on and on …

We have no control over these factors, so why not forget about all the absolute ‘I’m going to do X’ type resolutions and instead focus on what you want. can control, which is a well-executed process?

With that in mind, on this first trading day of 2022, let’s turn our attention to developing an investment plan.

Even if you are only moderately successful in implementing it this year, chances are it will still be of great help to your portfolio in 2022.

Let’s go.

*** Create the perfect wallet for you

Step 1: Open your calendar and choose a day / time when you can devote 100% of your attention to your wallet. Say 30-60 minutes. But if you have more time, wonderful.

2nd step: Before logging in and viewing your existing portfolio, stop. Think about the investments that would go into a “perfect” portfolio today, in the future.

For this step, what you currently own is irrelevant. This is a mental exercise to help you identify a “best of” portfolio based on your goals and investment needs.

Thinking about this, ask yourself …

What is the main purpose of the portfolio? Capital growth? Income? A mix? Why? Over what period of time? Is it a defensive focus or are you looking to grow aggressively? How much volatility can you handle?

Then refine.

Taking into account the objectives that you have just identified as well as your answers to the aforementioned questions, which asset classes should appear in this portfolio? From which world markets? What trends do you want to represent? In what attributions? What else? What other considerations should be taken into account in that perfect wallet?

Continue to be more granular …

Within each of the asset classes, markets or trends that you have chosen, which securities and / or other investments offer you, in your opinion, the best exposure?

This process can be as simple or as detailed as you want and tailored to your unique situation.

For example, suppose you typically entrust your stock selection to experts; you have a few choices from our stable of analysts – stocks of Louis Navellier, Eric Fry and Luke Lango; the trades of John Jagerson and Wade Hansen; Luke and Charlie Shrem’s altcoins; and the private investments of Cody Shirk.

In this situation, you might want to consider how much weight you want to give to the choices of each analyst as part of your overall portfolio.

Whatever you think is appropriate for your financial situation and specific goals, write it down.

Whether you are rating specific stocks or allocations to specific analysts’ choices, it can be very helpful to detail Why you’ve made that choice, which will tie it into your overall portfolio goal.

For example, “I will be weighting 10% of my overall portfolio in Eric Fry’s commodities, as this will provide diversification against the largest equity component in my portfolio, while also giving me exposure to massive trends. like electric vehicles and new generation batteries. “

Basically, document the reason for all of your choices and how they support your primary investment goal.

Step 3: Be realistic about your desire to swing for the fences.

We almost all fantasize about throwing a few dollars on, say, a penny stock, and seeing it explode in value eight months later. We now drive a new Porsche, or take a vacation in Europe, or put the kids in an elite private school, whatever your fantasy …

So, let’s be realistic about this.

Choose a percentage of your investable assets that you are willing to gamble with. The amount should not be more than what you could lose completely without affecting your sleep. Whether it’s 0.05%, 1%, or 15%, be honest with yourself.

It is often helpful to turn your chosen percentage into an actual dollar amount depending on the size of your portfolio. Then image burn that money.

Are you still comfortable? If so, great. Otherwise, reduce your percentage of play.

Step 4: It’s time to bring your existing portfolio into the mix.

Line up your current wallet next to the “perfect” wallet you just created.

Note the deviations.

Is there a stock in your existing portfolio that you wouldn’t include today with new money? He gets the ax.

Do you have 95% of your stock in US-centric companies when you want it to be only 65%? You need to do a bit of trimming.

No exposure to 5G stocks in your current portfolio but want some? It’s time to buy.

“But wait!” you say. “It’s not that easy. I have significant capital gains on some of my current stocks that I would sell otherwise” (or you have another reason to avoid changing your portfolio).

Well, there are always complications. But if so, at least identify when and how you’re going to make the necessary change – whatever it is.

Consider why …

Allowing an underperforming investment to stay in your portfolio year after year to avoid paying premium comes at a huge opportunity cost. Yes, you will suffer the short term pain of a tax impact on a capital gain, but think about the negative possibilities …

What if this investment suffers a big disappointment in terms of profits?

The stocks are plunging, and your unrealized paper loss is far greater than the actual loss you would have suffered if you had just sold it and paid taxes.

On the other hand, if it isn’t performing badly, but is just trading sideways, think about what that capital could pay you in for a much stronger investment. Even a 1.5% money market fund would be a better use of your capital than a stock that isn’t going anywhere (or going down).

So if you have a reason why you don’t want to sell an inherited asset, fine. But at least be intellectually honest with yourself about why you won’t sell, recognizing the opportunity cost.

And remember, you don’t have to sell a bad heirloom all at once. Maybe you’d better support it if you sold it in pieces. Be creative on how you might solve the problem. Don’t let a toxic investment take its toll on your wallet unintentionally.

Step 5: At this point, write down your entire investment plan.

It can be as detailed as you want. But in general, it will have the following characteristics:

  • Your overall portfolio goal. Growth? Income? A mix?
  • Your current holdings
  • Your desired ‘perfect’ holdings (and an awareness of how each of those individual holdings will support your overall portfolio goal)
  • The strategy you will use to move from your current wallet to your new perfect wallet (including the reality of taxes and so on)
  • Your plan to get rid of your gambling itch – will you let those investments reach $ 0 if necessary? Or will you sell with a stop-loss? And the benefits? Will you sell when you reach “x%” or will you let it roll? Think about these scenarios
  • The future date on which you will rebalance and / or revalue your overall portfolio
  • The criteria by which you will remove an asset from your portfolio. (Has it hit a stop-loss? Has it quadrupled and you are taking profit? Has your reason for owning it changed? And so on…)
  • How you will use the new money to add to your wallet. For example, will you increase the size of each of your existing stocks? Or will you add more only to stocks that are falling, trading at lower valuations? Or will the new money be used to buy brand new stocks that you find in the coming year?

Your investment plan can obviously be much more granular, but if you do just that it will give you a leg up on 99% of other investors.

I hope 2022 is great for you and your family. And one way to make it “financially” fantastic is to create your own investment plan – today.

Good evening and good 2022,

Jeff Remsbourg


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