Karl Siegling, CIO of Cadence Capital says he scales into positions, increasing if the scenario unfolds in a positive way

Karl Siegling, CIO of Cadence Capital says he scales into positions, increasing if the scenario unfolds in a positive way. If we do find something cheap we put one per cent of the fund into it, and if it goes up in value we add another one per cent and another one per cent...we scale into our positions. So our position starts small and gets to a maximum of 5 per cent in the portfolio. 5, 6, 7 years ago you might have thought an iron ore company was a great company, people were telling you resources boom, stronger for longer, stronger forever...then it all just ended...so you've got to start with a small position based on the knowledge that you have. The thing that I notice with a lot of people that start off investing for the first time, they'll put 20% of their money into one position. That's a big risk...Why have strong conviction initially? Why not have a small position and add to it as it goes your way? (Source: Eureka and Cadence Website)


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