Portfolio Methodology
This page provides a chronological overview of the ATAD portfolio mechanics and methodology, and any changes I’ve made to my approach over time.
2020
Initial Approach:
Evaluate underlying stocks of the Vanguard Total Stock Marketing Index ($VTSAX) in alphabetical order
Decide to invest $10 into the company or into $VTI (ETF that tracks $VTSAX)
Report on the results of this equal weighted portfolio through the year
Benchmark against results of continuously buying $10 of $VTI each trading day
Compare individual stock performance to the $VTI for the same holding period
Year End Review (Draft):
Review all individual stocks that didn’t beat the index during their holding period, and decide if they get to continue in the index in the next year (add to sell list)
Review all anti-portfolio stocks that performed better than the index for their holding period (from the decision date), and determine whether they should be included starting in 2021 (add to buy list)
At the end of each calendar year, decide how much additional lump sum contribution to make to the fund
Rebalance the total portfolio holdings, based on market cap weight
2021 (Draft)
Adding New Stocks:
Evaluate underlying stocks of the Vanguard Total Stock Marketing Index ($VTSAX) in alphabetical order
Decide to invest in the company, or in the $VTI (ETF that tracks $VTSAX)
New stocks will be added at their market cap adjusted weight for that trading day, and then addressed for any true up at the quarterly rebalancing
Report on the results of this equal weighted portfolio through the year
Benchmark against results of continuously buying $10 of $VTI each trading day
Compare individual stock performance to the $VTI for the same holding period
Quarterly Rebalancing Approach:
At the end of each calendar quarter, decide how much additional lump sum contribution to make to the fund
Rebalance the total portfolio holdings, based on market cap weight
Year End Review (Draft):
Iterate on the 2020 year end process - TBD
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