build a foolproof portfolio

You need to know this.

I was at a talk yesterday from a fund manager (AUM £1.3bn) that has delivered 167% over the past 3 years.

— He does not have a quantifiable edge.

— He only buys quality businesses over $100bn in market cap.

— There is no quantitative methodology.

Lesson in there.

The lesson being, slim down the amount of stocks or assets you look at.

They have 25 stocks in the portfolio.

They have 5 on the investment team.

That means FULL TIME EVERY DAY, they are covering 5 stocks each.

Another team member keeps track of potentials that fit their criteria that are worth taking a look at.

Consider the top 10 stocks in the SPX cover just over 40% of the price move of the entire index…

While at the August 2025 rebalance, the smallest 50 stocks in the SP500 were each weighted at about 0.01 – 0.04%.

You need 25 of them to have the same weight as a mid tier stock like McDonalds…

How can you take advantage?

On a watchlist, pick twenty five stocks in 5 different sectors.

Three which are HOT (maybe semiconductors, nuclear and defence (which these days is more and more tied to future innovation)) and two which are more non-cyclical (consumer staples, utilities, healthcare).

Overweight in the hot category with most of your selections being towards the top of the index (maybe Nvidia, Broadcomm or another) with another one or two stocks related to the semis industry towards the middle to bottom (you’re looking at future growth here while they have a smaller market cap and your position should be smaller here).

Then do the same for the other sectors.

What you may notice is your volatility gets a little smoothed by the non-cyclicals and the lower PE sectors while you retain the nice growth boost from the innovation names.

This then gets you in portfolio manager mode.

Couple this with the methods we teach in the Academy and you start to get a systemised process down which really, really reaps rewards.