Strategic Investing and Portfolio Management

Why this list?

Use your money as an asset to make more money. Any salary is good for maintaining, but once you reach your 30s and 40s and hopefully become debt free, you will eventually make more than your salary if you manage your investments properly. At the same time, there’s no such thing as free lunch, so don’t forget to invest in yourself and diversify.

How do I holistically look at my portfolio?

This is NOT an article on financial freedom or how to save money. I am writing this assuming the reader has a large cash position (e.g. hypothetically winning $100k post tax lottery) or has seen gains in certain areas and would like to rebalance their portfolio to diversify their exposure.

Operational

Cash needed for recurring bills (usually in your commercial bank account with FDIC insurance) — I personally calculate up to 4 months of run costs to keep as cash in my Checking account. There’s some benefits to a higher yield savings account with tax exemptions, but it’s almost too small of a percent to look at. You’re better off paying for premier status features and buying a high dividend stock than just keeping money in a savings account.

Strategic

Long time horizon (5–10 years)

  • High overhead
  • Low overhead
  • High risk / high yield
  • High risk / usually low yield in $, BUT great connections

Investment Hypotheses

My current investment hypothesis can be summarized as:

  • Money printer go brrr… — I’m nervous about the infinite money printing on a long term strategy. USD in the FX market is not great. I don’t want to see hyperinflation or deflation, so I keep a minimal cash USD position where possible.
  • Market correction in 2021 — I personally think all stocks are over-valued and pumped by retail options plays. It’s an interesting balance between dollar value and stocks. I’m not a long stocks or bonds investor and always set my limit sells for current exposure. This volatility is great for short term options trading.
  • Cryptocurrency growth, but not forever — Everything goes through cycles. I think we’re in a bull market sentiment even with a pull back (hopefully to 30k or so and breaking the 40k resistance for continued bull market sentiment). I don’t see a reverse sentiment until Sept/Oct based on fundamentals. I treat it like retirement funds so I only move to cash what I would pay as a personal salary to hopefully not get destroyed on taxes.
  • Always Invest in Yourself and Prune what you Ingest — We have full control of our digital circle as well as our social one. Make sure you’re consuming content that’s thoughtful and engaging with people. Most people join MBAs for the connections. Join some of these conversations for insight and learning directly from the source. People are surprisingly approachable.
  • Regulations on Crypto — Regulations killed Crypto adoption in 2018. So far only seeing good things coming from OCC and SEC. I am still bullish based on institutional investments.
  • Sentiment and $SPY breakout patterns for a blow-off top — There’s some leading indicators showing the replication of the dot com bubble crash. I will be concerned if everyone becomes bullish. Maybe off of vaccination news or sooner with change in political power — the markets will eventually reflect the economic situation.
  • Macro world events — I’ve been studying a lot of economic emerging patterns for adoption for fun. It’s all fascinating and makes me feel more in touch with true impact.
  • Industry diversification — Industries and assets are correlated. You can very easily see a large upside swing if you also bought blockchain-based stocks during the wave, but you’d be unevenly leveraged. I’ve personally had a very tech heavy portfolio because I know the companies, but I’m hoping to at least even out with pharmaceuticals.
  • Personal Time Management — Your time is more important of an investment than anything else. Unsubscribe to noise. Keep track of which communities you care about and what role you want to play. Upcoming post on this next week.

Rebalancing

I changed my long term strategy around March 2020 when the lockdown first started. It was a readjustment for the next year or so of movement. To be one step ahead, I am considering the first stock market bubble pop, then crypto bubble pop, then dollar diversification.

  • 75% long term strategic — It may be less liquid and I mostly keep it for savings with tax benefits.
  • 25% short term diversification — I may get lucky with some calls/puts or ALT coin bets, but it’s something to keep me busy. I try not to obsess too much over it because it’s very easy to waste a day just reading and processing without taking action.

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Clemens Wan

Clemens Wan

Solution Architect @consensys and "guy that likes to write lists of 30"