Alain Guillot

Life, Leadership, and Money Matters

I am starting a high-risk stock portfolio

high-risk portfolio
I built my wealth with passive, conservative investments

Ever since I arrive to Canada (22 years ago) I have been investing. I started investing $25/month when I could hardly pay the rent.

As I was learning, I made a lot of mistakes. Often times I lost more than 50% of my savings.

Eventually I got into index funds and ETFs and my wealth started to grow. My portfolio was composed of 1/3 Canadian, 1/3 US, and 1/3 International. No bonds.

It has been beautiful. The stock market had continued to grow relentlessly. My savings had grown enough that I can now live out of my savings, mind you that my living expenses are quite low.

Creating a high risk portfolio

After having my retirement secured, I want to start a high risk portfolio. This portfolio will be at a different financial institution with new money that I am earning from my blog. All this not to jeopardize my retirement portfolio.

I will contribute $500/month to this new portfolio. At the end of the year, I would have invested $6,000.

If I the end of the year, I have more than $6,000 I will consider the experiment a success, and I will continue for a second year. If at the end of the year I have less than 6,000, then I will close the account and consider the experiment a failure.

Why am I creating a high risk portfolio

As I watch the stock market going up and down, with my index funds I feel that I am benefiting from all that movement, but at the same time I feel disconnected.

In the same way that people like to get involved with politics and argue, and get passionate about a candidate or a political party, I like to get involved with the economy. I like to know what’s going on. I like to know which new technologies are changing our lives, which market forces are changing our society.

As an index investor, I don’t see those details. As an index investor I see the forest, I don’t see the trees.

What’s my investment strategy

The investment strategy I like to use is called Momentum Investing.

The idea is to invest in stocks that have a strong positive movement and to get in early enough to benefit from the upward momentum.

Momentum investors don’t care if a stock is considered to be too expensive, or overvalued. An expensive stock can be expensive for a long time, even years. For example, Netflix, Amazon, and Tesla have always been considered to be expensive, yet they have continued to rally for years.

My job will be to find the next Netflix and buy it regardless of the valuation.

The next part is my job is to get out when the momentum stops. Not to grab on to the hope that a stock will rebound. No, the idea is that if it’s not working out, I should get out as soon as I discover that the momentum is not on my favor.

In other words, I have to have a strong selling discipline in order for that whole thing to work out.

Come along for the ride

I am planning to share my journey in my blog. I will buy and share my purchases and sales with my readers.

If you would like to join me on this journey just let me via email and I will add your name to a special mailing list of my trading activities.

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