I thought I would share something that I’ve added to my Google Sheets portfolio tracker recently:
I think it’s important to match the allocation of your choices with the amount of conviction you have in those choices. For me, the conviction level above comes from:
- How well I know the company
- How much research I’ve done into it
- My knowledge of the industry and trends in it
- How certain I am that the company will succeed in the future
When markets are volatile, I think it’s especially important to review your allocation vs. conviction levels. If markets are tumbling, you don’t want a stock that you’re not sure about making up a huge part of your portfolio. I wish I had this a month ago because it would have helped me reduce my exposure to stocks that I have less conviction in.