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How to manage portifolio?

Posted: Fri Jun 21, 2013 11:00 pm
by oem7110
In portifolio, it contains stocks, bonds and cash. Recently the bond price drops, portifolio should decrease the percentage on holding positions, but the next question is

1) Should we sell stocks and hold cash? in order to balance the ratio between stock and bonds.
2) Should we increase cash percentage after selling bonds? but keep the stocks position unchange.

Does anyone have any suggestions on what to do with the money after selling bonds?

Thanks in advance for any suggestions

Posted: Sat Jun 22, 2013 12:10 am
by Jake Carriker
A software package like Trading Blox allows a person to ask questions like this, formulate several potential "answers" (trading rules or systems) and then test them on historical data to see which seem more or less promising. There might not be one right answer, but there might be one that meets your needs and seems to work in back-testing.

For instance, you can even test your premise, "Recently the bond price drops, portifolio should decrease the percentage..." How do you know what the portfolio should do? Software like Blox lets you get some data driven answers. The answers usually bring up more questions, which might require lots of opinions from others to answer, or might simply require more thinking and programming the questions into back-testing software.