Composer - Algorithmic Investing - Analyzing Saul’s Portfolio

Hi friends,

I am not a regular poster on Saul’s board but have been a longtime lurker for the past 3 years. I wouldnt call this post OT even though it is not an analysis of individual companies. The purpose of this post is to give back to a community who taught me alot about investing and provide the community with tools in order to better manage their portfolios.

What is composer?

It is an algorithmic investing platform as it has now been branded and is a low code platform where you can create strategies to beat the market. It enables fractional investing thus you can invest how much you want. More importantly the software can auto rebalance portfolios daily or with threshold settings aka if the individual stock goes up more then 5%. The only other software where I know this can be done is M1 finance where you create pies and allocate percentages to each pie. The other important feature is that it enables you to backtest strategies with ease and see the impact of portfolio changes. The ease of use of the software and the automation makes it a gamechanger in my opinion. Give it a look, and try it out for free.

Link to composer platform:

Why would Saul’s board like this software:

One of the things that I have struggled with in the past is the ability to make changes to my portfolio such as buying and selling decisions and changing allocations based on new thoughts from the board.

  1. Makes it easy to change allocations/ without any math:

See how I can tweak the percentages of positions each month by simply changing the percentage weighting:

  1. You can put in simple lines of code with no effort combining some risk management automated in your portfolio. A simple statement is if the market drops below the 200d moving average then pull out the money (I know the board doesnt really believe in technical analysis but you have the ability to add this simply and see the portfolio impact). Another simple if statement might be if the market drops more than X percent in a day or in 5 days pull my money out of the market.

  2. You can perform rebalancing on a daily setting to maintain weighting in certain allocations. This is a pain to do manually, but has a huge impact on portfolio results as I will show in a screenshot below. If you prefer to set percentage triggers aka 3% outside a given allocation and rebalance you can do so as well.

  1. You can quickly backtest within seconds and see the impact of the results.

Here is some magic, the plot below is Sauls portfolio from end of november backtested to the beginning of the year without any portfolio changes just with a rebalancing every 3% you can see the backtest is showing roughly ~120 % ytd. I have not seen from anyone’s portfolios this year those kind of returns because when we leave the buy/sell rebalance decisions to ourselves we cannot beat machines on a daily basis, and the beauty is that it is automated. Note this is the same portfolio that Saul has run this year. Furthermore the added effect of rebalancing is volatility reduction of a portfolio. All big investment firms are using this sort of automated rebalancing and now its available to you along with a visualization of the impact.

Furthermore you can visualize key portfolio metrics compared to index’s directly:

Also let me just say that I am not affiliated with composer in anyway this is simply a tool I enjoy using as it makes the process of investing even more handsoff. But if you would like to sign up here is my code - that will get both of us 50 dollars in composer credit dSZaeNk-TRADE. Note that they just enabled Traditional IRA/ROTH IRA capability and thus you can enable daily rebalancing without any tax burden.

Now continuing to lurk in quiet until I have something interesting to share of value… :wink:


@SaulR80683 Adding off topic post here, just wanted you to see it.