Manage your portfolio

Managing Your Portfolio the Simple Way

One of the biggest misconceptions about investing is that you have to be doing something every day, watching charts, adjusting stops, jumping in and out of trades. The truth is, successful portfolio management is about consistency, not constant action. With just three simple rules, you can manage your portfolio with confidence and peace of mind.

Rule 1: The VV Stop Price – Your Line in the Sand (From Day One)

The moment you buy a stock, the first thing you do is mark down the VV Stop Price. This is not optional. Think of it as your emergency exit plan — it’s already decided before the trade even begins.

Here’s how it works in practice:

  • You buy XYZ at $40.

  • On that day, VectorVest lists the Stop Price at $36.50.

  • That’s your sell line.  Place a Stop-Loss order with your brokerage at $36.50. 

From day one, this gives your trade structure. You don’t have to “wait and see” or let emotions creep in. Each night, you simply compare today’s close to the Stop Price. If it’s still above, hold. If it ever falls below, you’re out.

This way, every trade starts with a predefined exit. No excuses, no hesitation.

Rule 2: The 1–2% Risk Rule

Managing risk is a critical function of portfolio management.  A dollar weighted portfolio structure evenly distributes risk across the portfolio.  Before hitting the buy button, calculate exactly how much you’re willing to lose if the stop gets hit. That number should be 1–2% of your total account value.

Example:

  • Account = $50,000

  • Risk = 1% = $500

  • Entry = $40, Stop = $36.50 → $3.50 risk per share

  • Shares = $500 ÷ $3.50 = 143 shares

  • Total Position = 143 × $40 = $5,720

This ensures no single stock can sink your portfolio.

Rule 3: The Give Back Half Rule – Protect Wins Early

When your stock is up 10% or more, consider shifting gears from defense to profit protection. From then on, you won’t let it give back more than half of that gain.

Example:

  • Entry = $40, runs to $44 (+10%)

  • Gain = $4 → protect at least $2

  • New sell line = $42

If the stock keeps climbing, you keep raising the bar. If it pulls back, you still cash out with a profit.

The Routine

Portfolio management under these rules is refreshingly boring:

  1. Review the Market Timing signal.  Only buy new positions when the market gives a Safe to Buy signal.

  2. At the end of each day, check your holdings.

    1. Did any stock close below the VV Stop and receive a Sell rating? If yes, sell tomorrow if price moves lower.

    2. Did any stock cross the 10% gain mark? If yes, apply Give Back Half.

  3. Prepare a list of candidates if you have available buying power and a Safe to Buy signal.

Final Word

Successful portfolio management isn’t about chasing every tick. It’s about showing up with a clear routine:

  • Use the VV Stop from Day One as your exit plan.

  • Size positions with the 1–2% Risk Rule so losses stay small.

  • Lock in gains with the Give Back Half Rule so winners don’t slip away.

Do this consistently and you’ll find your portfolio doesn’t need constant attention — just steady discipline.