The main feature of Strategies in Manage is to organize your holdings depending on the strategies used. 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 (see below) 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.
Model Choices
The choices for what the Strategies follows are:
Follow Your Strategies - Follow one of your live strategies or books from Research.
Follow a Friend - Follow a friend's account, live strategy or live book which has been shared with you in a Group.
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 users of Portfolio123's Research tools.
Duplicate an Account - If you have multiple linked brokerage accounts, this allows both linked accounts to follow the same strategy.
Manual - Choose this when you are not following any model or are tracking a model external to Portfolio123.
Follow a Portfolio123 Allocation - Choose from 5 different ETF allocations.
Build Your Own Allocation - Combine individual stocks and ETFs to build and backtest a strategy.
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.
Rebalancing
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.
Figure 1. Sample of a strategy the is following a model.
