My Investment Strategy
🗒️ Description
This is my Investment Policy Statement (IPS) — the written plan I tie myself to before emotions hit, so that in a crash I only execute decisions, never create them under stress. It is the personal synthesis of the vault’s investing notes — Investment Strategies, Asset Allocation and Diversification, Investing Psychology, Cognitive Biases in Investing, and Bear Markets — 100 Years of History — applied to my profile.
The single most important idea in all of those notes: you cannot predict, but you can prepare (Howard Marks). This document is the preparation. It is not advice for anyone else, and it is not a forecast — it is a set of rules I commit to in advance.
It aligns with my Principles — especially #1: work or invest in projects that keep bringing income when done. In investing terms that means a bias toward compounding, income-producing assets held for the long run, technology and automation as leverage (auto-DCA, auto-rebalance), not constant hand-tuning.
🔗 Links
- 🧩 My Investor Profile
- 🧩 Target Asset Allocation
- 🧩 The Rules — What I Do
- 🧩 The Anti-Rules — What I Never Do
- 🧩 Bear-Market Plan (Pre-Mortem)
- 🧩 Review Cadence
- 🧩 Open Decisions — to fill in
🧩 My Investor Profile
| Dimension | My setting | Implication |
|---|---|---|
| Horizon | 10+ years, accumulation phase | Time is my edge — equities/compounding win over long horizons; short-term volatility is noise. |
| Goal | Build wealth → financial freedom (income that outlives the work) | Tilt toward assets that eventually throw off income (dividends, real estate, rent), per Principles #1. |
| Risk tolerance | High — I can hold a −50% drawdown without selling | Justifies a high equity weight and a real (but sized) crypto sleeve. See the stress test. |
| Income source | Active business income (PLSoft, 200IQ LABS) | Contributions are ongoing → DCA fits naturally; I am not forced to sell investments to live — my biggest structural advantage in a bear. |
| Biggest position | My own company, 200IQ LABS — most of my capital and my time | Concentrated, illiquid, founder risk. It is an investment, not just income — and it correlates with my tech/crypto holdings (all risk-on). |
| Current tilt | Tech stocks + tech ETFs + BTC/ETH crypto; almost no bonds; a token amount of gold | Honest reality: a high-beta, risk-on portfolio. Long horizon + high tolerance justify it, but the diversifiers are thin (see the concentration callout below). |
| Liquidity need from portfolio | Low in the next 10 yr | I can afford an illiquidity premium (the business stake, locked long-term positions). |
| Behavioral risk | Crypto 2021–22 scars (What mistakes I made on the crypto market in 2021-2022): no profit-taking, FOMO, projects I didn’t understand | Strategy must hard-code the lessons: rules over conviction, take-profit bands, position sizing, “understand it or don’t own it”. |
The honest constraint. High risk tolerance on paper is not the same as high risk capacity in a real −50% drawdown. The 2021–22 crypto cycle is my evidence that I felt the pain. So the plan leans on systems, not willpower — automation and pre-commitment, exactly as Investing Psychology argues (“tie yourself to the mast”).
🧩 Target Asset Allocation
A core–satellite structure (see Investment Strategies and Asset Allocation and Diversification): a boring, broad, low-cost core that does the compounding, plus smaller high-conviction satellites for convexity. This is also a barbell (Taleb): a safe-ish core + small convex bets, avoiding the fragile middle.
This table reflects my actual portfolio, not an aspirational model. The honest headline: I am concentrated in high-beta, risk-on assets — tech equities, crypto, and my own tech company — with very little ballast. That is a deliberate bet that fits my long horizon and high tolerance, but it means a tech-led structural bear hits all of it at once (correlations → 1, per Asset Allocation and Diversification and Bear Markets — 100 Years of History). Bands are intent; exact current weights live in Open Decisions.
| Sleeve | Role | Weight | Notes |
|---|---|---|---|
| Private business equity — 200IQ LABS | My biggest active bet + where my time goes | large | Illiquid, concentrated, founder risk. Not liquid ammunition — I can’t rebalance it. Mentally sized as venture-grade risk (could go to zero or many-x). |
| Tech equities + tech ETFs | Growth engine + some income | large | Held via mDM (mBank) and XTB. Concentrated in tech — high expected return, but high correlation with crypto and 200IQ. Dividend ETFs preferred — they serve the income goal (Principles #1). |
| Crypto — BTC + ETH | Convex high-vol engine | large | 4-year-cycle based, take-profit-driven, à la Phil Konieczny. Only what I understand (BTC/ETH) — no alt gambling. Full playbook: My Crypto Strategy · cycle mechanics: Bitcoin Cyclicality. See also Crypto Market State 2026. |
| Gold | Crisis hedge | tiny (~1 oz / ~31 g) | A real diversifier, but currently too small to move the portfolio. A token, not a position. |
| Bonds | Ballast | ~0 (by choice) | I don’t own what I don’t understand — and I don’t yet understand bonds beyond “least volatile, sometimes a crisis asset”. An honest gap, not a thesis (see Open Decisions). |
| Cash | Cushion + ammunition | replace | The dry powder to buy a capitulation and the buffer that stops forced selling. My only true non-correlated ballast since I skip bonds — and the most under-built piece given the concentration. |
The concentration I’m choosing — and its price. Tech stocks, crypto, and a tech startup are the same bet in three costumes: long-duration, risk-on, liquidity-sensitive. In a 2000- or 2022-style tech/structural bear they fall together — owning three names is not owning three risks. My long horizon, ongoing business income, and high tolerance make this defensible, not reckless. But it raises the price of exactly two things: (1) a real cash cushion — my only genuine ballast since I hold no bonds; and (2) crypto take-profit discipline — the one large sleeve I can actually trim near a cycle top. Those two are where this plan earns its keep.
On bonds (honest note). Skipping what I don’t understand is a sound rule (Cognitive Biases in Investing — don’t confuse familiarity with safety, but also don’t buy fragility you can’t model). Still, “I don’t understand bonds” is a fixable gap, not a law of nature. Until I close it, cash + gold must do the ballast job bonds usually do. Optional upgrade: learn the basics — duration, why bonds rose in 2008 but fell alongside stocks in 2022 — then decide a deliberate 0% or small allocation, rather than a default one.
🧩 The Rules — What I Do
- Contribute on a fixed schedule (DCA). A fixed amount every month into the core, regardless of headlines. Automated. Lump-sum beats DCA ~2/3 of the time mathematically, but DCA is the behavior that I will actually keep through fear — and consistency beats optimization I abandon.
- Rebalance by bands, not by feeling. When any sleeve drifts beyond its band (e.g. ±5pp) or on a fixed calendar (quarterly/annual), restore targets. This mechanically sells what’s expensive, buys what’s cheap — without forecasting. It is also my only “selling high” discipline.
- Take profit in crypto by rule. Pre-set bands (e.g. trim X% after a +Y% run, or scale out into strength) so I never repeat “didn’t take profit”. The rule decides, not the euphoria.
- Understand it or don’t own it. No position I can’t explain in two sentences. Kills the “got into a project I didn’t fully understand” mistake.
- Automate the boring parts. Auto-invest, auto-rebalance where possible. Technology as leverage (Principles #2). Fewer manual decisions = fewer emotional ones.
- Check the portfolio rarely. Frequent checking amplifies loss aversion (Investing Psychology). Quarterly review is enough; daily prices are noise.
- Keep a written log. Every non-automatic decision gets a one-line “why” recorded. Defeats hindsight bias and self-attribution (Cognitive Biases in Investing).
🧩 The Anti-Rules — What I Never Do
- Never sell the core in a panic. A bear is a sale on assets I’m accumulating, not an emergency. The cost of a bear isn’t the decline — it’s the missed rebound (Phase 5).
- Never try to time the exact top or bottom. Even Buffett and Marks can’t. I rebalance and DCA instead.
- Never use leverage in the long-term portfolio. Leverage turns a survivable drawdown into a forced sale.
- Never chase the asset that “keeps rising” or size a position from FOMO. Position size comes from the plan, not the hype.
- Never let crypto exceed its band on the way up without trimming — unrealized gains aren’t real until sized down.
- Never confuse a bull market for skill (Investing Psychology — overconfidence). The market did the work; my job is to stay in the game.
🧩 Bear-Market Plan (Pre-Mortem)
Written now, in calm, to be executed (never created) in fear. Lifted from the bear-market checklist.
Stress test (do the math on my real number): take current equity value and compute what’s left after −22% (mild), −35% (recession), −50% (structural). For each: (1) Can I hold without selling? (2) Will I be forced to sell? (3) Do I have ammunition to buy? Any “no” → equity weight is too high today.
When the bear comes, I will:
- Keep the automatic DCA running — it’s now buying at a discount.
- Rebalance into the decline (bands will say “buy equities”) in tranches, not all at once.
- Deploy a pre-decided slice of the cash cushion (I hold ~no bonds) near extreme fear — confluence of cheap valuation + wide credit spreads + VIX spike + AAII bears extreme — treating sentiment as context, not a precise date.
- Do nothing emotional. Re-read this note instead of acting.
When the bear comes, I will NOT: sell to cash “until it’s safe”, swear off an asset class (snakebite), or treat a counter-trend rally as the all-clear.
🧩 Review Cadence
| Frequency | What I review |
|---|---|
| Monthly | Confirm the automatic contribution fired. Nothing else. |
| Quarterly | Check drift vs bands; rebalance if breached. Glance at the compass indicators for context, not timing. |
| Annually | Re-read this whole IPS. Update target bands if my profile changed (new income, new goal, new horizon). Update the dated snapshot of current holdings. |
| After any big life change | Income change, large expense, new venture liquidity → re-run the stress test and re-set the cushion. |
🧩 Open Decisions — to fill in
The framework above is stable; these are the personal numbers and choices that make it operational.
Known (recorded):
- Accounts: brokerage = mDM (mBank) + XTB; tax wrappers = IKE + IKZE (currently underfunded); product preference = dividend ETFs.
- Holdings shape: tech equities + tech ETFs, BTC + ETH, ~1 oz gold, ~no bonds; plus the 200IQ LABS stake outside the liquid portfolio.
To decide / fill in:
- replace Current portfolio snapshot — actual % in each sleeve today (the real starting point for rebalancing and the stress test).
- replace Monthly contribution amount and the account/automation that executes it.
- replace Cash cushion target — months of expenses, held where. Priority — it’s my only real ballast given the concentration.
- replace Crypto take-profit bands — exact trigger levels and trim sizes → define in My Crypto Strategy.
- todo Max out IKE/IKZE before taxable buys. They’re underfunded — that’s tax-advantaged room (free tax alpha) I’m leaving on the table. Dividend ETFs especially benefit from the tax shelter.
- todo Bonds decision — learn the basics, then set a deliberate 0% or small allocation instead of a default-zero.
- todo Real estate — I listed it as an interest but hold none. Decide: add a rental/REIT income sleeve, or accept that 200IQ + dividend ETFs are my income path.
- todo Gold — grow the ~1 oz into a meaningful hedge (e.g. ~5%) or consciously leave it a token.
📖 Further reading/watching
- Vault foundations: Investment Strategies · Asset Allocation and Diversification · Investing Psychology · Cognitive Biases in Investing · Bear Markets — 100 Years of History
- My own scar tissue: What mistakes I made on the crypto market in 2021-2022
- Howard Marks, The Most Important Thing & Mastering the Market Cycle
- John Bogle, The Little Book of Common Sense Investing
- Benjamin Graham, The Intelligent Investor (the “Mr. Market” and margin-of-safety chapters)
- Morgan Housel, The Psychology of Money
Template: knowledge_note_info