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321 asset allocation

After reading Better Trading from Guppy, it makes me realized the need to have an asset allocation plan even as a trader. I’m coming with the idea of allocating cash into equities of 7 parts: 3 for big cap, 2 for mid cap and 1 for small cap.

Thinking back, I use to buy a lot of small cap as percentage gain is so much higher. But in the process, I have many losing position which forces me to cut losses. It’s more expensive to cut losses in the front that later. Hence to play safe, more should to allocated to big and volatile counters, which is harder to manipulate also.

Possibly have to think a way to track using the excel sheet.

p.s: another portfolio will be for dividend stocks giving out more than 8%

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  1. November 5, 2010 at 9:15 pm

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