I do this according to a strategy that I backtested. This backtest showed me good results with higher returns and lower volatility compared to different benchmarks like the Vanguard 500 index.
If you are interested in the backtest and want to see how you can backtest this and other portfolios yourself, checkout:
If you want to invest this way on Trading212 then you can copy the ‘Pie‘ that I use to invest this way. You can auto invest in the Pie to automate the whole process.
Below is a review of the live performance of this portfolio strategy (on a different broker platform).
As you will see below, the strategy works very well.
On my profile (of the broker I invested with in 2023) I could see my performance stats. On my private dashboard there were more stats available. I used these stats in my review of my portfolio dating December 27th 2023:
Live performance chart May-Dec 2023.
Portfolio Review May – Dec 2023
In May 2023 I started investing and trading at on the platform. This is a review of my trading and investing performance. The portfolio stats are the stats generated by the broker on my personal dashboard.
I will look at risk, growth, and cash flow, and I will compare the trading part of the portfolio with the investing part.
Risk
I aim to maintain an average risk score of 3-4 and a max risk score of 6-7.
My average risk score was 3 for the past 6 months. In October the max risk score rose to 6.
Growth performance compared to benchmarks
My portfolio vs SPX500
In May, June, and Juli my portfolio kept up with the S&P500 index. Then, as the index started to turn down in August, September, and October my portfolio kept moving up.
My portfolio vs NSDQ100
The NASDAQ did better than the S&P500.
My portfolio vs EUSTX50
The European stocks have shown minimal performance. That is easy to beat.
My Portfolio vs Bitcoin
Bitcoin outperformed my portfolio by more than 10 percent. Of course, my portfolio was a lot less volatile.
Cashflow
About 40% of my portfolio is in ETFs, which might pay dividends.
Expected dividends
Breakdown
Trading vs Investing
I keep a trading log where I record all my trades. I place all the trades using the cash balance in my portfolio as a trading margin.
Looking at my trading record I did 26R in May – December 2023. Risking 1% per trade it means that the trading performance was 26%
The overall portfolio performance is only 29,33%.
This would mean that the investing part of my portfolio had a performance of 3,33%.
Conclusion
My investing portfolio kept up with the overall market. It did slightly worse than the S&P500 and better than the EUSTX50. The investment side of my portfolio has been modeled and this showed that it will outperform the market in the long term.
Therefore I see no need to change course for the investing part of my portfolio.
Concerning the trading part, I will try to keep up the performance by staying disciplined in following my trading plan. I will also back-test more FX pairs and add the ones that are profitable with an acceptable draw down. I will also consider testing and trading non-FX assets, such as indices, metals, energy, and commodities.
