Fantasy Portfolio 2016

Monday, 4th January 2016 08:58 - by Moosh

For this year I am creating a fantasy portfolio in which I will demonstrate how I use my RSI zone money management technique for companies which I don’t currently hold, but I may wish to hold in the future.

I don’t live with my head in the clouds all the time and I am aware of other companies which are on the radar of some highly respected investors who have their eyes firmly on the balance sheets of these companies with respect to current and future fundamentals so it would be particularly useful for me to test out whether these investors may be of any use to me in the future by assessing their current expert skills with my money management strategy which I am comfortable with.

My fantasy portfolio has £10000 allocated to it and I am going to split it between a maximum of four companies at any one time, therefore each company has £2500 potentially allocated to it with the commission per trade set at £10. The initial tranche in each company will be £250 followed by further tranches of £250 only if they satisfy the following buying rules, and assuming the fundamentals haven’t deteriorated massively when the next potential buying time comes around:

-          Buy further tranches if the price drops 10% or more from the initial tranche BUT making sure that I am only buying ONCE A WEEK to avoid overtrading and only if the daily RSI goes oversold

-          NEVER buy into a rising price

My fantasy portfolio will consist of the following companies which have recently been highlighted as being ones to watch in the last few months by some who consider themselves on the ball with fundamentals:

• Modern Water Group (MWG)
• Orosur Mining (OMI)
• Paragon Entertainment (PEL)
• Servision (SEV)

To begin with, let’s assume I bought an initial tranche of £250 of each of the four companies, inclusive of costs, just before the market close on 31 December 2015 therefore I now hold:

• 3200 shares MWG bought at 7.5p, break even 8.13p
• 4173 shares OMI bought at 5.75p, break even 6.24p
• 14117 shares PEL bought at 1.7p, break even 1.85p
• 7384 shares SEV bought at 3.25p, break even 3.53p
• Cash remaining = £9000

I will continue to update my fantasy portfolio on a weekly basis here on my blog so look out for regular updates to see how I am progressing to test out whether my money management technique is indeed as robust as I believe it is, and whether those who are perceived to be good people to listen to about fundamentals, are just that.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.