Using Fidelity Baskets or M1 Finance Pies to Execute our Investment Strategy

You can run your portfolio without these, however these tools make investing with our strategy so much easier and emotion less.

Our investment strategy relies on a few essential activities:

1. Accurate position sizing

2. Frequent rebalancing as the allocations drift

3. Allocating new money to under allocated positions first

This can all be done with a spread sheet. In fact, this is how I started out managing my portfolio. However, I have realized that the Fidelity Baskets are custom built for exactly this use case. I am told M1 Finance lets you accomplish most or all of these tasks using their Pies feature, although I do not have first hand experience of using this.

Ever since Fidelity removed commissions on most stock transactions, and made it possible for us to buy fractional shares, the Basket functionality has become immensely more useful. We can now engage in more frequent rebalancing without worrying about transaction costs, and at the same time, each rebalancing brings us to precise allocations we have established using Kelly fractions.