new portfolio

CFA_Halifax Wrote: ------------------------------------------------------- > virginCFAhooker Wrote: > -------------------------------------------------- > ----- > > I started a new little portfolio where I > blindly > > buy 15 stocks based on a result of some screens > > (very carefully chosen screens). I then short > > indexes until the expected risk/reward of the > > portfolio is equal or less than that of large > cap > > stocks. > > > > For the week: The portfolio is down 2.3% (net). > > > > > QQQQ down 7.1% > > Emerging Markets down 5.8% > > Small caps down 6.5% > > Midcaps down 5.5% > > SP500 down 5% > > > > I don’t know if I’m happy or sad?, or if I’m > > measuring this right? or when I should > rebalance? > > Hmmmmmmm… > > But he beat the market Only relevant if these are appropriately chosen benchmarks. We need to know more about the stocks in the portfolio (mkt cap, country, etc) to determine whether this is good or bad. if you’re trying to build a track record, I don’t think these results can be used in a GIPS compliant presentation w/o an appropriately chosen benchmark before hand. :slight_smile:

Can the benchmark be treasuries? Then it’s an absolute return strategy.

It can be (as it is with my firm’s HF products)… If that’s the case, I’d say he had a bad week since the Treasuries returned a nominal amount! :wink:

if my portfolio was net long in equities why would I make treasuries my benchmark?

I heard you were going long stocks and short indices. If the beta of the portfolio balances out to zero, then treasuries might not be a bad benchmark. If you are long an equity benchmark, then you have to figure out which one and why, and that sounds like a more complicated task. Which benchmark do you want to target?