Trending Assets
Top investors this month
Trending Assets
Top investors this month
My 2022 Investment Strategy
Getting my thoughts together to publish at the start of the year was pretty brutal. Last two years, I got pretty lucky with trades like Novavx, NIO, and AMC. Then at the beginning of 2021, I flipped most of my stock portfolio into Crypto, specifically Ethereum and now Solana (my second biggest position after Eth2). This year aims to understand a macro environment better and build a portfolio that doesn't swing from growth stocks to Crypto without a clear strategy. Commonstock is an excellent place for me to write my thinking, get feedback and hold myself accountable. I hope you enjoy and please comment if you have thoughts!
These are assumptions I am working with
- Crypto (BTC to the 10M market cap altcoin) is the ultimate risk asset, a slight notch above the high growth tech stocks usually categorized as risk assets.
- The fiscal stimulus will not happen in 2022; we won't have a build-back better plan to pass congress. If we have stimulus, it will be targeted and nowhere near a trillion dollar budget.
- FED QE period will end in March 2022
- We will see lower growth through 2021 until interest rates start coming back down.
- With slower growth, there will be less liquidity in the market impacting risk assets negatively.
- Cryptos volatility should decrease as institutions join, but we could also see the bear and bull cycles alter from the past.
- Once inflation numbers are improving, monetary policy will attempt to speed up growth by keeping or returning interest rates to lower levels.
- Supply chain issues resolving will help the economy's general health and could increase liquidity.
- With slow growth and low liquidity, I want less exposure to risk assets and mostly in value stocks.
- With high growth and high liquidity, I want to have a more significant position in Crypto (ETH, SOL, DOT, and AMP)
I can explain why these are my crypto holdings in a later post.
Here is my current portfolio construction heading into 2022.
Crypto - 55%
- ETH 2 - 42%
- ETH 1 - 0%
- Sol - 38%
- Dot - 10%
- Amp - 10%
Cash - 30%
- USDC - 10%
- Cash - 90%
Brokerage - 10%
- Y, Alleghany - 100%
Options 5%
- SQQ call options
My Roth account has a lot of tech stocks; the plan is to keep buying my long-term bets here, not to try to trade in this account for the time being.
Okay, so this is how I am starting the quarter. How will I react to different market conditions?
- If there is a crypto rally ( which I expect early in Q1), I will trim my position to 40% and allocate more to Cash.
- If there is a crypto downturn, I plan on holding my positions (ETH2, my biggest position is locked anyway)
- If there is an overall market rally ill increase my SQQQ call contracts to an upper bound of 10% of my portfolio
- My Y holdings will stay 10% as a general value holding.
- My cash position will increase throughout the quarter; my overall sentiment around uncertainty is rising. The more uncertain I am, the closer I want my cash position to approach 50%.
I'll plan to do monthly memos as the year goes on and track my progress. I will also challenge myself to improve my technical analysis to trade crypto this year. I look forward to hearing from the Commonstock community about my strategy. 🚀
Already have an account?