Serving Conservative Investors Too

In the Portfolio Armor trading Substack, we lean toward aggressive trades, like buying shares of Super Micro Computer, Inc. (NASDAQ:SMCI) at $21.86 after its auditor quit. 

But the Portfolio Armor website offers something else for risk-averse investors. They can enter a dollar amount and their risk tolerance, and the site constructs a concentrated, hedged portfolio for them. That portfolio is designed to maximize the investor’s returns, while strictly limiting their risk to the maximum drawdown the investor indicated. 

Here’s an example that surprisingly included a leveraged, single-stock ETF. 

Hedged Portfolio For A Risk-Averse Small Investor

This was the hedged portfolio our site created 6 months ago for an investor with $30,000 who was unwilling to risk a decline of more than 13% over the next 6 months. 

The investor just entered that he had $30,000 and his maximum tolerable drawdown was 13%, and the site did the rest. It started by allocating equal dollar amounts into hedged positions in The Cooper Companies (NASDAQ:COO) and Robinhood Markets Inc. (NASDAQ:HOOD), which were top names of ours at the time. Then it rounded those dollar amounts down to round lots of each name. Afterwards, it allocated most of the cash left over from that rounding process to the Granite Shares 2x Long COIN Daily ETF (NASDAQ:CONL). That ETF is a 2x leveraged play on Coinbase Global, Inc. (NASDAQ:COIN). 

How That Hedged Portfolio Performed 

Over the next six months, that portfolio finished up 23.18%, versus up 13.94% for the SPDR S&P 500 Trust (SPY). 

If You’d Rather Hedge What You Already Have 

As a reminder, you can download our iPhone hedging app by clicking on the QR code below. You can also aim your iPhone camera at it.

Want a heads up next time we place an aggressive trade? You can subscribe to our trading Substack/occasional email list below. 

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