Swissquote Educational Webinar Series on Managing a Stock Portfolio
To host a webinar, nothing beats a “concrete” example. To do this we created a fictitious portfolio of international company securities. The notion of risk is obviously underlying and here is why and how.
Why an international stock portfolio?
It is common knowledge that not all sectors are represented on the Swiss market and/or that the leaders are not domiciled or processed in our domestic market.
What about volatility and diversification?
Volatility is considered a risk factor so putting all eggs in one basket does not seem like a winning strategy in the long term. An investor might therefore want to diversify their securities.
Résumé
Even if businesses within one industry are struggling, businesses within another industry may be performing well.
Investing in a new small business may offer greater growth potential, but this type of business usually represents a higher risk than larger companies.
This fictitious portfolio was built on an initial (fictitious) amount of CHF 100,000. It is composed of 18 large-cap companies, from 7 different sectors and representing 6 countries. It should be noted that 10% of the portfolio remains in cash to be able to purchase products Swiss DOTS if necessary.
Since the idea is to keep this portfolio throughout the year, trading gives way to the notion of long-term investment. The products Swiss DOTS allow you to manage certain risks or take a specific bet on one of the securities (upward or downward, but more particularly downward).
Below you will find the portfolio as of March 15, 2024.
All positions are subject to caution and during the first webinars several questions referred to the choice of stocks. Why Roche and not Novartis or Eli Lilly? Why not more pharmas? Why fossil fuel stocks? The answers are simply that this is an example of a fictitious portfolio that in a way involves several risks such as an under-representation of a sector or a company that would not be environmentally friendly or finally a specific risk. But this is an inherent part of any portfolio management.
In addition, it shows the effect of the exchange rate (if the investor was Swiss) and also the contribution of the dividend to the total performance of the portfolio. Please note that as this is a fictitious wallet, transaction fees are not taken into account.
What have been the Swiss DOTS operations to date?
On the eve of the publication of LVMH’s results we had bought Put Warrants to protect the position. The trade was sold on the day of the publication for a very modest gain.
To protect the portfolio we bought Put Warrants on Nvidia considering that if this stock were to fall, the market would follow this trend. This product Swiss DOTS expired worthless as you can imagine if you follow the stock markets.
Next webinar
It will take place on Tuesday July 16 before the summer break in August. We will show how the portfolio performed and what hedging operation we put in place.
The securities in this fictitious portfolio are not subject to recommendation or Swissquoteneither Thomas nor Marco. However, Thomas and Marco are directly or indirectly (via funds or ETFs) shareholders of one or more securities.
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