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Thank you for reading the second memo regarding portfolio construction. I thought this would be a good place to start. I know this sounds like a dry topic so I plan on keeping it engaging by providing examples on each component. Before I go any further I must say I am (generally) a delta neutral trader. I (generally) do not have directional exposure. This is important to highlight as if you are a swing trader this article may not be for you. However, I will give an example on how a directional trader could incorporate this mental model into their portfolio. In the future I plan to write an article on how I see markets and why I trade with little directional risk. Leave a comment if you would like me to make that post next. At a high level I break my portfolio up into 3 components: Risk premia strategies Active strategies Alpha strategies They are not equally weighted as risk premia strategies are relatively easy to find whereas alpha strategies are obviously harder to find. Risk premia

Hello my dear reader, Thank you for reading the second memo regarding portfolio construction. I thought this would be a good place to start. I know this sounds like a dry topic so I plan on keeping it engaging by providing examples on each component. Before I go any further I must say I am (generally) a delta neutral trader. I (generally) do not have directional exposure. This is important to highlight as if you are a swing trader this article may not be for you. However, I will give an example on how a directional trader could incorporate this mental model into their portfolio. In the…

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