I have just had the realisation, maybe a revelation, after a few beers, that maybe I’ve been going about this slightly wrong. I mean a few beers and a spreadsheet combined with last years month by month share price figures. Conventional wisdom is not to catch a falling knife, but I’ve been doing quite well overall in recent years (I wasn’t minus equity in 2018-19 when most funds including my world tracker was). So I was thinking the following:

Why not robo-target my monthly regular investment pot to invest in the companies or OIEC, or ETF with the highest fall over previous month? I’m also tracking fall over the financial year (which for me runs on an ISA year basis) – so I’ll probably likely also have a next-preference to the overall yearly fallers after the monthly, all things being equal. The math said I would have overall ended up with a higher percentage of winners last year by adopting this strategy.

Is this a stupid plan, I’d be glad of your comments, but I think I’m going to try it for a 3-6 month period now given I expect we’re in an extreme volatility period. Now as my investments are publicly listed on this blog month by month, this would allow others to also follow this so hence I am pre-notifying this will be the plan for a few months at least. I will exclude “new investments” under 1% from this rule to allow me to top up to a reasonable 4% min holding, otherwise I wouldn’t be able to sell without horrible trading losses.

I also couldn’t have implemented this due to sheer lack of portfolio size in 2017-19… I would have ended up with a far to high percentage in single stocks if I had followed this strategy (on positive, I’d have gained > 20% from those investments, but I also do need to keep an eye on the percentages from a risk perspective). If a single, non fund investment exceeds 10%, that should be a marker to stop doing this – unless it’s one of the major holdings I have previously identified (LifeStategy 60% ACC or Fundsmith).

So those are the new “robo” rules I’m setting my portfolio. Comments please!

Given I usually put a lot of planning into new shares in portfolio, this should help maximise returns over the year – if it works as well as the numbers showed last year (if I hadn’t had beers as I wrote this I would have done a nice diagram!), it’ll be a permanent feature. Analysing the numbers in excel, I missed out on ~ 4% of extra performance, which is reasonably substantial in both portfolios from not doing this in 2018..

I don’t need to be told the obvious downside, this could be chasing losses and may horribly fail – and it will multiply this failure if this IS the case, but my monthly reinvestment’s are split value wise – there should be a further post as I work out percentage top ups from the available funds, as I have an immediate feeling it needs to be proportionally weighted, which could result in some fun math in the future. But that’s after I try this for 6 months.