How do I go about defining a portfolio strategy/allocation

When I first started investing (before the kids arrived) I was a 100% passive investor. I was very clear on how my portfolio was constructed and target allocations for each holding.

Since then, it has taken a few years to get back to the point where I have disposable income to save and I’m very much aware that the gains made by some companies over the course of the last year have seduced me into transforming my portfolio to a position where it’s now heavily invested into US tech stocks.

While that has seen me do well over the last 12 months, tt has also made me realise, though, that I’m not really following any particular strategy - and that I need a more diversified and strategic approach to succeed over the long term. Preferably one that provides elements of passive investing while still allowing me the opportunity to evaluate businesses and invest directly in companies.

So, to my questions:

  • Are there any books/links that I can look at to help me come up with a good strategy? One that I can come back to balance my portfolio at regular intervals.
  • How did you come up with your strategy and portfolio allocation?
  • Any other general thoughts/useful titbits?

Thanks very much in advance.

Perhaps consider the Core and Satellite strategy?

The Core or main part of your portfolio will be those passives which you were investing in.

The Satellite or additional (smaller) positions will be the individual stocks you are actively evaluating and picking.

Obviously, how big the satellite part of your portfolio is up to you and depends on your own risk appetite and you could probably have more than one satellite.

I loosely follow this strategy, my core is made up of ETFs and investment trusts, the satellite are my individual shares - the latter only account for around 6-7% of the portfolio so if I mess up, losses won’t have any real impact.


I had a recommendation on this book. Bought it today:

Smart Portfolios: A Practical Guide to Building and Maintaining Intelligent Investment Portfolios Smart Portfolios: A Practical Guide to Building and Maintaining Intelligent Investment Portfolios: Robert Carver: 9780857195319: Books