June 10, 2018

Part IV of this series considers what goes into building a stock portfolio for the long term. A look at the magnitude of the problem of finding the best portfolio mix possible to the acceptance of the best you can do which is designing a good trading system able to prosper for decades. In the end, it is the account balance that will really matter.

We need something on which to base our decision-making. It can be complex, sophisticated, or as simple as we want. But for sure, we will need some kind of "excuse" to execute a trade, whatever the decision process may be. You need a trade triggering mechanism ready to make those trading decisions, sequenced, and distributed over its 20-year simulation interval. And that strategy should be able to do the same for the next 20years after that, which should start now.

The following HTML file explores the possibilities of a stock trading strategy's payoff matrix with some design considerations.


Basic Portfolio Math IV

Related Files: 

Basic Portfolio Math I

Basic Portfolio Math II

Basic Portfolio Math III

Created...June 10,  2018, © Guy R. Fleury. All rights reserved.