Market Pulse: The number of holdings matters more than you think
On Fridays, we tie together the stock market week in the Market Pulse with a focus on stocks, strategies and how they can be put into practice. We review companies that have taken a place in our portfolios, explain the decisions behind them and show you how you can understand our methods in depth. This is not about speculation or gut feeling – it is about building robust strategies with clear logic.
This week, the Volatility & Quality stock portfolio was rebalanced – a factor-based strategy with 30 holdings.
But why 30? Why not 10 or 60?
In today's publication, I share a study that clearly shows how the number of holdings affects both return and risk and why the choice of portfolio size can be crucial to your long-term success.
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ℹ️ IMPORTANT INFORMATION
Understanding the overall market situation can be important – not for predicting the future, but for managing risk. But when it comes to the investment decisions themselves, we don’t rely on interpretations or gut feelings. There we use systematic strategies and objective signals – precisely to avoid guesswork, emotions and inconsistency over time. For us, analysis only becomes truly valuable when it is combined with structure, discipline and clear rules.
That's precisely why we rely on systematic strategies and objective signals – to remove guesswork, emotion and speculation.
We offer systematic strategies for different risk levels and goals – in equities and multi-asset. All are based on proven methods with a focus on risk management, structure and long-term stability. We do the analysis for you and provide clear signals, so you can act rationally even when the market is not. The point is not to use all the strategies, but to choose the ones that fit your investment plan.
By combining different markets, time horizons and working methods, we spread risk in a powerful way. Think of our offering as a toolbox – you pick the tools that fit your plan and build a robust portfolio.
One advantage of trading systematically is that we can follow strategies consistently without deviations and thus generate more consistent results over time. We strive to be objective and methodical instead of irrational players like many others in the market. A complete market player knows that discretionary decisions are sometimes required, but has managed to eliminate emotions from the decision-making process.
- Click here to read frequently asked questions (FAQ).
- Click here to download Erik's rules of thumb (PDF).
⚠️ RISK WARNING
Investing in financial markets always involves risk. Past performance is no guarantee of future results, and there is a possibility that you may lose all or part of your invested capital. Our analyses and indicators are based on historical data and statistical models, but these models cannot predict future market movements with complete certainty.
The value of investments may fluctuate significantly due to market conditions, company-specific factors and global economic events. It is important that you carefully consider your financial situation and your ability to bear potential losses before investing. The Service does not provide personal investment advice and recommends that you seek independent financial advice before making any investment decisions.
NeuroQuant employees may own or trade securities mentioned in analyses or based on indicators used in our services. This may potentially create conflicts of interest, but we strive for full transparency and professional integrity in all our activities. Following our analyses and indicators involves increased risk if the market moves in an unpredictable manner. You should only invest money that you are prepared to lose and understand that past performance, analyses or models provided through the service do not guarantee future results.
