2018 Tuesday – How we will be Building our New $100,000 Portfolios

Image result for new year stock market 2018Happy new year!

I hope everyone had a nice holiday.  Over at PSW, we've been in CASH!!! since early December so we'll be starting fresh this year and setting up 4 new virtual portfolios so we can get a bit more educational and teach our Members both basic and advanced techniques for wealth building.  Our 4 Portfolios for 2018 will be:

  • Options Opportunity Portfolio (OOP) – This was orignally called the 5% Portfolio, as the goal was to use $100,000 to make $5,000 a month but, at Seeking Alpha, where we have a version of this portfolio, they felt is was confusing people to call it a 5% Portfolio, so we changed the name to what we do – look for opportunistic option plays.  Originally, we were more short-term but I realized not that many people have time to trade so actively so we went with more long-term trades, which still make plenty of money in the short-term.  While 5% a month may seem like a high goal, we were up over 100% in each of the two years we ran the portfolio.
  • Butterfly Portfolio – "Butterfly" refers to the type of spreads we use, though they are not typical butterflies as we use extended time spreads as well.  Since we began our first butterfly portfolio in 2006, it has been our most consistent player, easily averaging 40% annual returns with much lower volatility than the other portfolios.  Though the spreads are complicated, ofen with 4 or more legs, they are generally low-touch and their self-hedging nature means they have much lower volatility than our more directional bets we take in the other portfolios.  
  • Short-Term Portfolio (STP) – Our STP is part one of our larger, paired portfolio and the purpose of the STP is to protect the Long-Term Portfolio (LTP), which is generally 100% bullish.  So the STP tends to have shorter-term bearish bets and index hedges but we do take the occasional short-term plays if something interesting comes up.  We'll also use this portfolio for short-term speculation for trades which do not fit into our LTP.
  • Long-Term Portfolio (LTP) – Our LTP is our bread and butter portfolio and is much larger ($500,000) than the other 3.  The STP/LTP strategy

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