Investment Journal / Decisions

Copper — setting a weight cap and pausing new buys

Decision

Cap copper's weight and stop adding. Sell the holdings that are back above my purchase price (in profit) first. (Replaced on October 28 by the loss-position rule: if the indicator is unfavorable, I now sell by the deadline even at a loss.)

Why

Copper tracks the economic cycle. Holding a large weight before the cycle turns means taking the full drop. Gold behaves differently, but right now both are being pressed by the economy and interest rates together.

Expected outcome

By the review date (December 30), some of it is sold and copper's weight falls below the cap. (This is the expectation written on September 30.)

Options not taken

• No cap — this would win if the economy improves.

Since the decision

copper futures -1.5% (Oct 30)
below the decision-date close — an interim picture; whether it was right is judged on the review date