Stocks tracker technology is enabling the core-satellite strategy and pushes it to new heights

Stocks tracker technology

The core-satellite strategy is one of the common strategies that many people use without knowing the term. The strategy refers to the combination of a solid ‘core’ with a set of satellites that revolve around it. The core is fixed; it is a set of investments that do not change over a longer period. On the other hand, satellites are more flexible and can change over time. This is based on the market needs as well as personal interests. This should also be one of the first questions an investor asks himself: “How much time do I want to spend researching potential satellites and tracking them?” The answer to this question helps to shape the investment strategy and in turn the portfolio. In this article, we will look at how a stocks tracker can support such a strategy to its fullest extent.

How to determine the core?

Being a very important piece of the investment strategy, you could argue that much time should go into researching the ‘core’ of the strategy. This could not be more wrong. When you invest for longer periods, you need to have a diversified portfolio. This includes markets as well as industries. Next, this needs to change over time: a static portfolio is never a good thing. This means that you end up having an index fund that has a very big spread. Good examples of performers are the MSCi World Index as well as the S&P 500. You can keep those funds for long periods, and enjoy a good return.

How do I come up with good satellite investments?

The tricky part is in the satellites. How do you determine them? For how long do you keep them? This is all dependent on your risk appetite, as well as your knowledge of the market. For example, if you are active in a specific technology domain, you might prefer investing in such a capability instead of an unknown market. You probably have more knowledge about the stock as well, meaning you know which ones to pick. In this fashion, you can already come up with good satellites. You can also decide to do more research, which is time-consuming and should be considered with care.

Bucketing them in the stocks tracker

Once you have selected the satellites, you can add them to a stocks tracker. In such a tracker application, you can create portfolios of stocks according to your needs. This means that you can add a portfolio for the core, as well as for the individual satellites. This allows you to measure the performance of the buckets in a better way. Once you see that a satellite is not outperforming the core, it might make sense to reconsider. In the end, this is the end goal: outperforming the general marketing. Why otherwise waste time and resources on finding potential satellites? Naturally, it also helps to become a better investor.

Want to learn more about a stocks tracker and how it can support? You can visit the website of Delta, a leading provider of tracking technology. They even directly integrate with brokers to show a real-time overview of your holdings. No more fiddling with spreadsheets and adding transactions and dividend payments any longer.