Tariff Uncertainty and Risk Management Changes | Week 9
Despite all of the world events that have been happening this past month, the portfolio has stayed relatively straight-lined. As you can see below, we are still up close to 8%, with the only red being in our NFLX position. Furthermore, the past weeks I haven’t updated were uneventful for trading: only the METU position closed as it hit our stop loss, the purchase price leaving no gain or loss. This week’s issue is to share the tariff-specific risk management guardrails—while keeping the aggressive risk tolerance of the portfolio—as we journey through economic uncertainty (again).
Individual Leveraged Positions
As I previously touched on in my ‘How I Trade During Tariffs’ newsletter, I recommended not entering any NEW leveraged positions as long as the uncertainty of future tariffs lies ahead. What does this mean for our current portfolio, which is almost entirely comprised of leveraged positions? Great question!
Due to the significantly higher volatility in these times, I will be more aggressive in taking profits on the swingy days that favor my leveraged positions. Thus, lowering my take profits from 3 portions stretched across +20-40% to only 2 portions (minus a ‘runner’ holding) stretching from 15-25%, with room for situational exceptions. Doing this obviously locks in a chunk of profits on a likely up day during uncertainty, banking capital for a future down day to be used as a buying opportunity in unleveraged holdings.
