The Importance Of Understanding The Weights And Allocations Within An Investment Portfolio

By Howie Bick
TheAnalystHandbook.com

"Howie Bick is the founder of The Analyst Handbook. The Analyst Handbook is a collection of 16 guides created to help current and aspiring Analysts advance their careers. Prior to founding The Analyst Handbook, Howie was a financial analyst."

When you’re building a portfolio, there are a variety of different factors and variables that you have to consider. Depending on the types of objectives, or the type of financial goals you have, will be important in creating your investment portfolio. The type of future outlook you have, the level of confidence you have, and the upside you believe certain assets to have will determine the amount of resources or capital you allocate to it, and the types of weight you give certain assets within your investment portfolio.

Within your portfolio, each investment or asset makes up a different number or percentage of your assets or your portfolio. Depending on the amount of investment or value an investment has, compared to the value of the total overall portfolio, is how you determine the amount of weight or allocation a certain asset or investment has. It’s also worth noting, that keeping cash on the sidelines, or not having a full allocation is also an option, if you feel the market is in a downward trajectory or going to decline. Deciding not to invest or use your capital is an investment the same way it is to use or invest your capital.

Additionally, the type of investor you are also plays a role in the way you invest your assets. Whether you’re a conservative investor by nature, an aggressive one, or somewhere in the middle. The portfolio you have, or the one you construct, is often created with a certain goal or objective in mind. This means, the capital you are choosing to invest or allocate to the portfolio, usually has an objective or a goal in mind. Whether if it’s saving for a new home, a certain investment, or a certain upcoming expense, the type of objective or agenda you have for yourself or your life is going to be a factor in the creation of your portfolio.

A lot of it also depends on where you are in life. Are you younger or older, do you have a family, are you trying to save for your kids, the life factors around you also play a role when you’re creating or shaping your portfolio. There are lots of things to consider when it comes to creating a portfolio, and there are many factors you have to consider when deciding which assets to invest in, and how much to invest into them.

The weight you give to a certain investment or asset, shows the level of confidence you have for it, the type of risk you’re willing to open yourself up to from it, and the effect it’s going to have on your overall portfolio. Why the weights are so important to consider, is because it has a strong effect on the way your portfolio moves, whether up or down. The more allocation or weight you give an asset, the more the portfolio is going to be affected or move as it moves.

A thing to keep in mind when it comes to allocations, is the direction you believe the market is going into, and whether a certain industry or company is going to perform well in the future. If you like a company or their business model and feel like they are only going to grow their revenue, their market share, and their income, then consider those when you’re making the different allocations within your portfolio. Depending on the asset classes you like the best, the type of companies you’re most bullish, and the way you build your portfolio, are important factors in determining the weights of each asset and investment.

Another important thing to consider is rebalancing your portfolio or readjusting the weights within your portfolio. When one asset performs really well, or a certain investment performs great, often times the allocation or the weight it has tends to outweigh what you originally thought or believed it would be. This is a great problem to have, as it means your investment has performed better than you expected it to. If this happens, then you have a decision to make. Whether to keep the money invested, and the investment the way it is, or readjust the allocation or the weight. Ultimately, it’s a decision that’s up to you, and for you to decide. To determine whether you’d like to keep the capital or allocation invested or look to reallocate the capital. Either way, it’s an awesome place to be in, and a great problem to have. As it means your investment or portfolio has done well, and you’re in a better position than where you once were.

Conclusion

Creating a portfolio comes with lots of things to consider. The one we tried to highlight in this article, are the allocations you make, and the weights you given to certain investments or assets. The allocations you make play an important role in the way your portfolio moves, the portfolios performance, and the risk your portfolio is exposed to. The performance and the allocations within your portfolio are closely tied, as they are two of the major contributing factors to the fluctuations and movements within your portfolio. The allocations and weights you assign to certain investments indicate the confidence level, or the belief you have in them.

Depending on the way the market is headed, or the future outlook of a company, it’s smart to keep in mind how much of your capital is invested into them, and what you feel comfortable with. As you build your portfolio, learn and understand the market, and are able to evaluate and analyze investments, you’re able to get a glimpse into how to become a financial analyst. By building a portfolio, and gaining that experience, you’re able to get some insight into what some financial analysts do, and the type of tasks they are used to.

We hope you were able to get a bit more insight and information on the importance of the various allocations and weights of your assets within your portfolio. Best of luck, and we wish you nothing but success.

First Come the Majors, then the Mid-Tiers, then the Juniors

Collin Kettell
Palisades Goldcorp Ltd.

 

 

First Come the Majors, then the Mid-Tiers, then the Juniors

Understanding how mining cycles work is a pre-requisite in junior resource investing.

Whether you talk to Rick Rule, (who we just interviewed on Palisade Radio on this very topic), or Frank Giustra, or Jordan Roy Byrne, they will all explain the same phenomenon.

As gold prices start to move up, major mining companies see an almost immediate lift in share price. This is intuitive, as their profits increase from realizing higher prices on the sale of their gold.

Over time, this money begins to trickle down to mid-tier producers, as investors seek out better returns in lesser-known names.

Finally, money makes its way down to the most speculative names – the juniors.

Juniors rarely produce anything; instead, constantly diluting to raise capital for exploration. Their goal is to develop or explore for the deposits of tomorrow. This is a necessary component of the mining market and without juniors, new discoveries and reserve replacement would be left to the majors. So how is this cycle playing out today?

It is no surprise to readers that Newmont (NYSE:NEM) and Barrick (NYSE:GOLD) are breaking out to new highs. As such, the Van Eck Gold Miners ETF (NYSE:GDX) has blown through both its 2016 highs, and moved meaningfully above pre COVID-19 highs.

Mid-tiers, as represented by the Van Eck Junior Gold ETF (NYSE:GDXJ) have fared well, but are still about 5% from their 2016 highs and 10% from reaching pre COVID-19 prices. This is a key level that could be taken out any day.

For investors paying attention to juniors, they have been on a tear the past two weeks. Still, they remain way off from their 2016 highs and have yet to regain losses from the recent sell off.

Keep your eye on these charts over the coming weeks. Once the mid-tiers take out old highs, next up will be the juniors. And there is a long way to go and lots of gains to be made in short order!

Palisades Goldcorp is invested exclusively in the junior resource sector, a segment of the market that historically provides investors with spectacular gains. We are on the cusp of a major junior breakout. When it comes, watch out.

Until next week,

Collin Kettell
Founder & Executive Chairman
Palisades Goldcorp Ltd.

 

Real Estate Crash The Next Shoe To Drop – Part III

April 23, 2020
Chris Vermeulen
TheTechnicalTraders.com

 

 

 

Note from Dudley - These Guys Are Good:
Chris and his team are providing investors with a great road map for the direction of the markets, which is why I am also a paid subscriber to TheTechnicalTraders services and encourage you to consider a subscription as well, The ideal service to supplement your other subscriptions as well as my CommonStockWarrants.com.

REAL ESTATE CRASH THE NEXT SHOE TO DROP – PART III

 

 

 

                      Stock Warrants - If Not Now, When? GET STARTED NOW

Investors don’t forget the great opportunities available with stock warrants which will increase your potential gains and greatly decrease your investment cost by at least half.

E.B. Tucker with Casey Research recently referred to Dudley as ‘the top expert in the field with over 40 years of experience‘ with stock warrants.

“I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.”

Jeff Baker
Senior Analyst – Admin/Web Developer
B.Sc. Geological Sciences (UTEP)
Common Stock Warrants & Junior Mining News

Gold Stocks About To Rally While Oil Becomes Less Than Worthless, What?

April 22, 2020
Chris Vermeulen
TheTechnicalTraders.com

 

 

 

Note from Dudley - These Guys Are Good:
Chris and his team are providing investors with a great road map for the direction of the markets, which is why I am also a paid subscriber to TheTechnicalTraders services and encourage you to consider a subscription as well, The ideal service to supplement your other subscriptions as well as my CommonStockWarrants.com.

GOLD STOCK ABOUT TO RALLY WHILE OIL BECOMES LESS THAN WORTHLESS, WHAT?

 

 

 

                      Stock Warrants - If Not Now, When? GET STARTED NOW

Investors don’t forget the great opportunities available with stock warrants which will increase your potential gains and greatly decrease your investment cost by at least half.

E.B. Tucker with Casey Research recently referred to Dudley as ‘the top expert in the field with over 40 years of experience‘ with stock warrants.

“I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.”

Jeff Baker
Senior Analyst – Admin/Web Developer
B.Sc. Geological Sciences (UTEP)
Common Stock Warrants & Junior Mining News

Are We in a Gold Bull Market? You Betcha!

Collin Kettell
Palisades Goldcorp Ltd.

 

 

Gold investors appear cautiously optimistic. Fundamentals paint a strong narrative for gold – endless money printing, swelling central bank balance sheets, negative rates, and the advent of helicopter money.

This has generated a consensus amongst investors that gold and gold stocks will perform well in the mid to long term. But what about the short term?

The recent past can often blur and distort future expectations. Gold’s capitulation in March, in tandem with the broader equities, raises the question… will gold stocks get pulled down again if the Dow makes a second leg lower?

The ferocious, but short-lived bull market for gold stocks in 2016 is of little help either, leaving gold investors questioning the longevity of any future move.

Avid resource investors, (particularly junior investors), know that gold stocks witness rocket like lifts offs from major lows. Big gains can be made at the beginning of a resource bull market and arriving on time for lift off is critical.

Indications of possible turning points, are therefore, very helpful to assuage one’s fears and move money from the sidelines into the trade. I believe no better assurance can be found than examining the bellwethers of the gold industry.

Barrick Gold (NYSE:GOLD) and Newmont Mining (NYSE:NEM) have both reached critical inflection points. While general equities have made a 50% retracement towards pre-crash levels, these major miners have regained their losses and broken out to multi-year highs.

In light of this, fear that gold stocks could follow general equities lower should diminish.

Furthermore, the implications of the economic destruction unfolding and the Fed’s unprecedented response is becoming more mainstream. Just today, Bank of America released an 18 month price target of $3,000 per ounce!

What this means for us junior investors is that money pouring into gold and major mining stocks, will soon begin reaching the juniors. When it starts, it will only gain steam, and soon enough a bubble of epic proportions will unfold.

As my article last week pointed out, junior miners have been mired in a decade long bear market, one that is likely reaching a conclusion.

With higher gold prices, major miners will be further starved for reserve replacement and growth. This will require discoveries – discoveries that must come from junior explorers. As M&A heats up in a rising gold price environment, risky exploration capital will become easier to access, as the potential rewards for investors increase.

We are witnessing a generational opportunity in junior resource stocks and this is why I established Palisades Goldcorp – a $150M portfolio of resource stocks set to go public later this year.

Capitalizing off of moves in the junior space is more art than science. Understanding capital structure, knowing the players involved, and spotting which projects will pique the interest of investors are key in picking out the money-making opportunities. That, coupled with deploying capital through the use of private placement financings will be the key differentiator between those able to capture hundred percent gains and those who produce thousand percent gains. If you are interested in learning more about Palisades, feel free to reach out by emailing me personally at collin@palisades.ca.

Until next week,

Collin Kettell
Founder & Executive Chairman
Palisades Goldcorp Ltd.

GOLD in the New Financial Landscape

If you have trouble viewing the webcast above, please try this: RIA Replay Link.

Download PDF of Slide Presentation

April 15, 2020 | (57 mins 07 secs)

Speakers: Ed Coyne, Senior Managing Director, Global Sales, Whitney George, Chief Investment Officer, and John Hathaway, Senior Portfolio Manager (Sprott Asset Management).

Topic: The COVID-19 pandemic has created a new financial landscape, where returns from traditional financial assets, in real terms, could be subpar for many years. By contrast, this crisis continues to highlight gold’s value as a safe haven investment.

We discussed:

  • Gold is one of the few assets that offers both downside protection and upside performance in the new financial landscape
  • Gold is under-owned and under-utilized; we are in the early stages of what could be a very dynamic bull market
  • M&A cycle among gold miners continues with more small- and mid-cap companies needing to scale to remain relevant
  • Next major test for gold is $1,800, putting $2,000 and new highs within reach

Please contact the Sprott Team at 888.622.1813 for more information on this webcast. You can also email us at invest@sprott.com

 

WTI Oil Plunges Most On Record

By Dudley Pierce Baker

With todays historic plunge in WTI oil we eagerly await the opinion of our technical go to guy, Chris Vermeulen at TheTechnicalTraders.com.

Chris told us around 12:00PM, eastern time:

..."Oil has been a bell-weather of the global economy for decades.  Higher oil prices suggest demand for oil is strong, and the global economy is clicking right along.  The recent move to levels below $30 somewhat concerned but also expected as the COVID-19 virus event shut down large swaths of the global economy.
I believe the global stock markets have severely mispriced the true consequences of the COVID-19 global economic shutdown and, thus, are continuing to ignore the true risks in the major markets.  I also believe the real outcome of this virus event is a more protracted bottoming event taking place over the next 12 to 24+ months – not some "deep V bottom...."

Chris also, around 2:00PM, closed his long position in the SPY, making a nice profit for his followers.

I suggest you visit their website as we wait for Chris's current opinion on the markets and crude oil.

Finding Opportunities In Todays Markets

By Dudley Pierce Baker
Founder - Editor
JuniorMiningNews.com
CommonStockWarrants.com

This is a great time to be an investor as these challenging times bring opportunities.

In my opinion, investors, should have several investment services at their disposal to assist them with ideas and suggested investments at all times, but especially now!

I subscribe to many services to assist me in maintaining my databases, newsfeeds, charting, technical analysis and investment ideas, etc., including, StockWatch.com, Stockhouse.com, StockCharts.com, The Technical Traders, The Morgan Report and InkResearch.com (for insider trading and insider positions).

To assist you I suggest the following services:

1. The Technical Traders - Chris Vermeulen and his team are
doing an excellent job of tracking the markets, virtually all markets, from a techical point of view. They nailed this 'black  swan' event at least a month or so before it happened. I realize that many of you are not interested in being an active trader, neither am I, but there views on direction and timing are proving to be very relevant to all investors. Visit their website and see for yourself what they are doing and whether or not their services or for you.

THE BLACK SWAN EVENT BEGINS - January 26, 2020

2. The Morgan Report - David Morgan and his team, Bruce Ross and David Smith are all friends and business associates of mine for over 15 years. I call David Morgan, 'mister silver', with his standing and knowledge in the investment community.
His service provides investors with interesting articles every month along with Davids portfolio suggestions and much much more. Remember, the more ideas you have the better you can make informed decisions.

3. Common Stock Warrants - This is my service which I started in 2005. The core service is a database of all stock warrants trading in the United States and Canada and in all industries and sectors. Thus all of the miners, biotechnology, pharmaceutical, and everything else you can imagine. 'If there is a warrant trading, it is in our database'. In addition, my Gold and Lifetime subscribers have access to my personal portfolio and see all that I own, shares and warrants. In addition, I do a weekly audio for subscribers.

  

Taken together, 'we' have you covered - something for you to thing about over the next few days.

Thanks for your time,
Dudley

 

If Investors Crunched Data Like This Their Expectations Would Change Dramatically

 

 

April 16, 2020
Chris Vermeulen
TheTechnicalTraders.com

 

 

Note from Dudley - These Guys Are Good:
Chris and his team are providing investors with a great road map for the direction of the markets, which is why I am also a paid subscriber to TheTechnicalTraders services and encourage you to consider a subscription as well, The ideal service to supplement your other subscriptions as well as my CommonStockWarrants.com.

IF INVESTORS CRUNCHED DATA LIKE THIS THEIR EXPECTATIONS WOULD CHANGE DRAMATICALLY

Also, you might want to revisit this previous article as well:

Three Charts Every Trader And Investor Must See

 

 

 

                      Stock Warrants - If Not Now, When? GET STARTED NOW

Investors don’t forget the great opportunities available with stock warrants which will increase your potential gains and greatly decrease your investment cost by at least half.

E.B. Tucker with Casey Research, recently referred to Dudley as ‘the top expert in the field with over 40 years of experience‘ with stock warrants.

“I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.”

Jeff Baker
Senior Analyst – Admin/Web Developer
B.Sc. Geological Sciences (UTEP)
Common Stock Warrants & Junior Mining News

The Next Big Breakout Trade: Large Cap Gold Stocks

 

 

April 16, 2020
Chris Vermeulen
TheTechnicalTraders.com

 

 

Note from Dudley - These Guys Are Good:
Chris and his team are providing investors with a great road map for the direction of the markets, which is why I am also a paid subscriber to TheTechnicalTraders services and encourage you to consider a subscription as well, The ideal service to supplement your other subscriptions as well as my CommonStockWarrants.com.

THE NEXT BIG BREAKOUT TRADE: LARGE CAP GOLD STOCKS

 

 

 

                      Stock Warrants - If Not Now, When? GET STARTED NOW

Investors don’t forget the great opportunities available with stock warrants which will increase your potential gains and greatly decrease your investment cost by at least half.

E.B. Tucker with Casey Research, recently referred to Dudley as ‘the top expert in the field with over 40 years of experience‘ with stock warrants.

“I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.”

Jeff Baker
Senior Analyst – Admin/Web Developer
B.Sc. Geological Sciences (UTEP)
Common Stock Warrants & Junior Mining News