The main feature of Strategies is to organize the Account transactions by different investing strategies. Whereas your brokerage account looks like a single blob of stocks, Portfolio123's Accounts can track the performance of multiple strategies.
Strategies possess some interesting features:
- Strategies can either follow a model or be manual.
- Strategies do not hold any cash. They are assigned stock transactions from the Account, and therefore only hold positions. This also means they are always 100% invested.
- Even though they hold no cash, dividends earned by the positions are included in the stated returns.
- Strategies can be deleted and recreated by transferring transactions.
- Strategies can be rebalanced, bought or sold with single clicks.
Whilst some of these features may seem a bit strange, Strategies should feel very natural to use.
The choices for what the Strategies follows are:
- Portfolio123 Model - These are rules-based models created by Portfolio123's investment team. There are several families of models depending on your risk appetite and goals.
- Designer Model - These are automated strategies designed by skilled users of Portfolio123's Research tools.
- Research Model - A Model from your Research section.
- Manual - Choose this when you are not following any model or are tracking a model external to Portfolio123.
You can change the Model being followed by a Strategy at any time. Simply click on "Unfollow Model" to convert the Strategy into a Manual one, then click "Follow A Model" to pick a new Model.
For Strategies that follow Models you will get a "Rebalance" warning when they are not in sync with the underlying Model. Rebalancing is a single-click operation the shows all the necessary transactions to return the model to syncing (within the tolerance allowed).
Rebalancing a Strategy is optional; it is simply a warning. You can choose to ignore the alert, but the Rebalance button will remain present. You can also stray considerably from a model by adding your own transactions. This may be desirable, for example, at the end of the year for tax purposes.