HELP! How do you manage your 10k in the Fantasy fund manager?

Hi guys! This is about strategy and I am asking for HELP about the management of the FANTASY FUND MANAGER.

I am asking because I am pretty sure I am NOT using it the correct way and I’d like to improve under this aspect. I know that probably there is someone experienced in managing strategically these kind of tools and I am a noob at this. :sweat_smile:

So…in what % you use your fund and in what % you take it as reserve to buy into something cheap if the chance comes?

What % do you allocate for each market you decide to enter?

ONCE you are into a market how much do you decrease if you see things are not going as you expected?
Do you go to 0 directly or do you just decrease your % in that particular market?

Thank you for your advices in advance😁

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Diversification is important. You should choose funds that you believe have the potential to grow,. If you feel strongly about any one in particular, go heavier on that. Pay attention to the news and adjust accordingly. Good luck!

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I agree with all of this…mainly I am trying to work out if I am looking for long term bets? (Over the quarter) Should I have put all the cash in or kept some back? Should I skim the profit off the top when there is growth? (Particularly bitcoin!)

It’s totally new!

If anyone knows of any decent resources to learn from I would be grateful!

I do appreciate that nobody wants to ‘share the secret sauce of their success’ - but general advice is welcomed!

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Hi Karen! Basically I search foe good picks just watching at the technicals aspects I can see on the charts.

Unfortunately I don’t think that a gut and “follow the news” approach is correct and profitable in the long term.
I explain you why I think this…usually is quite the opposite in the sense that is the news that follows what has already happened to the market. Meaning that the big money moves before the news go out.

In any case thank you for shareing your thinking Karen! Very much appreciated!! :sun_with_face::smiley:

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Thanks for your feedback @Tradelta. How do you find the company in the first place, if not for reading business news? Don’t you think learning about a business is important before deciding to invest in it? Once you have a list of companies, your tech analysis is definitely the way to go in deciding where to invest!! I agree that the news follows what already happened, but the news also tells us what is going to happen. Some believe ‘buy on the bad news, sell on the good news’.

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Hi @KD8482. One of the nice things about this FFM is that no one is losing ‘real’ money. You have the freedom to switch it up as often as you like. One strategy is to

As you said, then put that profit back in the market toward other investments. Others like to buy and hold. There really is not one correct way to go about investing. Some of it is your comfort/risk tolerances level.
I’m sure if you Google ‘investing for beginners’, there will be lots of valuable information. I don’t know of any one particular source…but have fun with the FFM!!!

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Thanks Karen :smiley:

This message is reassuring that there isn’t a correct way!

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@Tradelta hey Stefano.

The most basic asset allocation / moderns portfolio theory would have you account for two factors: risk and return.

Risk will impact your Fantasy FM results in the drawdown and volatility, and returns on the performance.

So, at a very basic level, you first need to define the level of risk that you are comfortable with; you can estimate this with the historic volatility/standard deviation of the weekly or monthly return of the assets that you’re intersted in. You need to do a regression analysis against the returns of the index on which a stock is listed, or against a benchmark for such asset. The beta factor calculated will tell you how volatile an asset is, below 1.0 is low risk, and the further it is above 1.0, the riskier it is. Negative betas will be for assets that are negatively correlated between each other, like gold and stocks. Which in theory would “cancel” each other out.

This level of risk tolerance will also tell you when to close a position when it’s not going your way.

Second, build portfolio based on your expected returns of the assets. Here is obviousky the hard part, go for high growth / high risk, mid growth / mid risk, low growth / low risk???.. Also, you have to kind of do some “divination” about which assets are going to actually present growth in the future… there are two main strategies that are followed here, growth stocks vs. value stocks:

You will have to do some research to have some 20 or 30 different assets on which to invest, and see from the historic data (along with your future expectations) which currently present you with and attractive entry position. The rest that may be good investments, but don’t currently offer a good entry price, you keep on your watch to invest at some point in the future (the cash reserve you mentioned).

In relation to cryptos, this can be considered highly volatile. Particularly Bitcoin, I’m not sure it has that much growth potential in relation to the constant swings on its price.

In relation to cash, yes, i would say maybe keep 5% or 10% in a real life situation as a reserve. But for Fantasy, I’m going all in, as there is no waiting period from closing a position, getting back the cash and opening up another position.

In very broad terms, maybe allocate 10%-15% to high risk, 20%-30% mid risk, and the rest to low risk.

If you wish to go deeper into the technical aspects of portfolio construction check out the academic papers of Harry Merkowitz, Keneth French, Eugene Fama.

I’m also open for further questions guys

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Amazing! Thank you for such a detailed response
(with resources! My librarian heart! :sparkling_heart:)

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This is a great explanation for those who base their strategy on following economic theory :smiley:

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Aaaaaaaa…sure sure Karen!! Sorry didn’t understood that you was referring at a initial stage of selection. In my aswer before I was referring about the news AFTER we have done the proper reasearches over the assets we bring into our portfolio. You are super correct in this…sorry :joy::joy:

What i was trying to understand initially, is the correct menagement of our portfolios once we load our baskets.

In any case, If it can be of help toI anyone guys I can show how I personally select my assets…the parameters i look into a chart to understand if it is a good pick or not. So than if you see some passage in my process that to you does not sounds so good you can correct me…or if you find something good you can take from it.

Now it is time to go to work for me. See you later guys!! :heart::sun_with_face::rocket:

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Thank you thousand Carlos!! This clarifies a lot of things I had in my mind!! COOL STUFF!! :sunglasses:

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My 2 cents.

Don’t listen to anyone! :smile: You’ve gotta find the style that suits you. There’s loads of different ways to invest and, honestly, you will get more out of it if you do your own research. You could look at day trading, value investing, CANSLIM, etc etc etc and they’ll all come at it from different angles.

One important caveat…
If you know that you are realistically not going to spend lots of your spare time researching stocks and asset classes then I would just pick some solid assets that have a proven record of returns over time and stick with them. If you blindly select assets and then try to time the market by buying and selling, you’ll probably find you’ll lose a lot, unless you’re quite lucky.

Consider this an excercise in learning. Most (honest) traders will tell you they lost money when they started out. You can do it risk free here and then, once you have your confidence up and a technique that suits you, you can try with some real money :smile:

As always, this is not financial advice. I am not a financial advisor. Always do your own research please people.

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I’m sure this has been stated somewhere…but I want to double check…

Like CPs, does this reset at the beginning of each quarter?

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By the way, this is not trading advice, just some thoughts on the theory. :joy::joy::joy:

And as a complementary note, I would advice you guys to calculate the fair price of the stocks you’re interested.

Either by dividend discount model, cash flow model, multiples, etc

I mean, you can check out the prices as calculated by numerous analysts on Yahoo Finance, but it’s always good to crunch the numbers and arrive at your own conclusions.

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Agree. The majority won’t have the time to do all the research and all the numericals that would be ideally necessary.

Still, it is not difficult to identify assets that will most probably present returns in the future.

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Hey @KD8482, thanks for bringing it up.

Yes and No :upside_down_face:

Yes, your end position in the leaderboard at the end of a quarter (we are working on that) will be reset to zero, and you will have a fresh start at again. There will be big cash prizes for the top Pynksters. (calculation will be a super mix of Growth, Drawdown, Volatility(ST-DEV), and Sharpe Ratio)

No, what you manage to build as a portfolio, it will stay and you will be able to see your past performances.

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Thanks @mosigman, that is kinda a cheat sheet for this topic :upside_down_face:

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As you can see from all the posts here Kerry, there are many approaches, strategies, ideas about investing. Just let it be fun for you and like with predicting— over time you will develop your own style!!!

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Agree @KarenM there are many, many, many ways to do this. Some will like to follow a very numerical approach, and on the other end of the spectrum, people following a more qualitative approach over asset valuation.

The thing is to find the style that suits the individual.

Fortunately, Pynk now presents us with this sort of “play ground” to do it.

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