FAQ #21

(a) Strategy has gone 20% into CASH (LIQUIDBEES)

(b) Strategy needs CASH (funds) outside the portfolio for rebalance purposes.

I’m confused between the two CASH references.

(a) Strategy going into CASH (LIQUIDBEES)

This component is naturally built into absolute momentum based strategies. When markets present few or no opportunities, the strategy allocates to LIQUIDBEES which helps immensely in outperforming the benchmark index on the downside too.

When we say now have 20% CASH in the portfolio, what it means is the construct of the portfolio is such that 80% of it is allocated to stocks and rest 20% is invested in LIQUIDBEES (CASH). Here are a couple of < video1 | video2 > that explain this better.

What to do ?

Accept this suggestion which comes as a part of rebalance as it is without modifying any order.

(b) CASH (Additional Funds) for Rebalance

Only 80% of the funds from sale proceeds hit your Demat account on the same day while the rest is released 2 days later (T+2 – This will subsequently move to T+1 later but that doesn’t change this case).

We request at least 7% of the current value of the smallcase to be made available in your broker funds at the time of rebalance.

Here’s a video that explains this aspect.

If you have any further doubts or questions, please send an email to support@weekendinvesting.com

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June 17, 2022 by Weekend Investing
by Weekend Investing
by Weekend Investing

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    FAQ #21