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Dan Shy
dan.shy@gmail.com
IN THIS ISSUE:
Welcome!
Model Portfolio
Newsletter Structure
A newsletter that will approach the markets with reason and rationality. And as the aileron of an airplane provides stability and balance, this newsletter too aims to reflect a balanced approach to the capital markets. At the same time this newsletter will provide a 'look over my shoulder' as to my thoughts regarding the economy, as well as specific dividend investing and trading ideas for the upcoming week. However this particular issue of this newsletter will not include specific investing or trading ideas. Because this issue of Aileron Market Balance will serve as one of the introductory issues for all new subscribers to the newsletter from this point forward. If I am going to allow ones to 'look over my shoulder' to view my investment and trading ideas though this newsletter in a responsible manner, I first need to discuss the absolute basics ...
Portfolio Management
This newsletter will be run using a portfolio management system I call: The Three Sisters. So let's begin to talk about how I construct any portfolio, and the history and reasoning behind it's construction. An explanation of that portfolio management system is thus called for
Of course, there can be periods of drawdown. Drawdown is a losing trade or period of losing trades; and it is a fact and reality of life in trading. All too often, market educators fail to mention the inevitability of drawdown. Which is why you'll generally only hear the honest, and real traders will talk about their mistakes and bad trades. So of the three sisters, this is the sister that is by far, the most demanding. One mistake? And this 'sister' will take you to the cleaners. Since developing this strategy, I have had years where I enjoyed 356% returns (definitely my best to date). I have had years where I enjoyed 30% returns. One year however it was 2003. Well, I have talked publicly about 2003 when I had my daily blog. I ended the year down, -3.57% for the year. All of that good work I had built up over the course of months? Gone, because of one mistake. I learned my lesson. I have never repeated that mistake. But at the same time, I was looking at a lot of hard trading work down the drain. You can't eat off of -3.57% This taught me to develop other avenues of income. Enter, the second sister. Investing
I have related on many occasions, that in 2003 I began to develop my own personal "three sisters" portfolio management system. What is the "three sisters"? The three sisters is a portfolio strategy that can provide fantastic returns through trading, cash flow through investing, and a firm foundation to the other two accounts through savings. Thus, it allows for the accumulation of assets on three diversified fronts. I keep these sisters as separate accounts. When one of the sisters or accounts is having a hard time, then one of the other 'sisters' who is having a better time 'helps out' the other sister. There is the added bonus, that each sister or account, tends to give the other accounts boosts during good times. So let's move on, and discuss the first 'sister'.
If you are not familiar with my outline of money management principles, again, you can review that information for free. It will explain what I mean by both a Drawdown Kill Switch (Some call this the 'ruin level' of an account, that is a percentage of the
Model Portfolio
For who has despised the day of small things? The Bible, Zechariah 4:10 The Model Portfolio will be a feature of this newsletter and it will track these tactics in action, week by week. As I have a penchant for helping those without a lot of funds? We'll begin the Model Portfolio with only $15,000 to implement this strategy. Please keep in mind, that I am not a trading or investing adviser. What I offer here in this newsletter is simply a look over my shoulder, as to how I am approaching each week, and with what mindset. Even actions based off of this newsletter, the results would differ. Why? Perhaps someone decided to put off purchasing a stock that I went ahead and purchased for the dividend investing portfolio. Perhaps someone bought the same stock after their own due diligence, but actually bought it for a better price. Perhaps the size of
Newsletter Structure
Each week, as I discuss trades, I will track the success through a Model Portfolio that will benchmark the results and worth of this newsletter. It is important to note and understand how I trade and invest; and thus it is vital that you understand that each Sunday I have a list of possible trades and market actions. I set up a list of parameters that I look to see the market fulfill before I pull the trigger on such investments. If the market fulfills those parameters, then I will read the tape on the market, and possibly pull the trigger. If the market does not live up to the parameters that I specify on Sunday night, then I most likely will not pull the trigger. I am also going to attempt to set up some sort of 'live feed' on the website that I plan on building, so ones will be able to see when and if I have entered a trade
Until next time, stay safe trade well, and remember that loving other people doesn't cost a dime.
Note: The above statements should not be construed as an investment or trading recommendation. Aileron Market Balance is a newsletter that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to
change. Any trades or investments that I discuss within this newsletter are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this newsletter; as larger or smaller accounts may require a different strategy as the ones presented here. This newsletter simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 15 years of experience in trading and investing in these markets. The Model Portfolio accounts are hypothetical accounts, with all of the inherent problems therein, which are used within this newsletter in an attempt to track and benchmark the results of this newsletter, and is run for the education of other traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this newsletter are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy.