Page 4 - What is the Squad List?

Although you will need to review your portfolio, the idea is that once it’s done, it’s easy to manage and you don’t need to stress about it. My expertise is in commodities, so that’s the kind of portfolio I will be talking about, but I think this approach works for any portfolio should you choose something else.
I’ve chosen commodities because I’m hoping they’ve got a great future (take a look at the analysis below) If’I’d done this 20 years ago, it’d probably have been property, the key is that I’m looking for something that performs in the future, not the past. I’m looking through the windscreen, not the rearview mirror.
The concept behind what I’m going to talk about is that investments should work as a team. They ALL have a role to play in your portfolio. It’s important to understand why you’ve got then and more importantly, what you want them to do for you. It sounds obvious but most people don’t think about this. Going back to my portfolio, I build it with two points at the front of my mind:
1.What do I want it to do?
2. What level of risk am I comfortable with?
It’s vital that these two points are consistent with one another. You must have a portfolio that can deliver the returns you want with the level of risk you’re comfortable with. For example, there’s no point in wanting a portfolio to deliver returns that would require a much higher level of risk than you’re comfortable with. They MUST be consistent.
I use what I call the Squad List to build my Portfolio. The aim is simple:
Try to make money (but be realistic about how much I want to make, given the risks I’m prepared to take).
Manage risk (some investments being lower risk than others). Once it’s done, I will look at the overall risk of the portfolio as well as the individual investments I’ve made. What I mean by this is that I look at the team, not just the individual players (the companies and funds). I want lots of diversity – different commodities, currencies and countries. I don’t want to stress about stuff.
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