Investment Foundations
Build, defend, and monitor an investment portfolio
Thirteen portfolio decisions connect your goal, market beliefs, risk limits, allocation, evidence, valuation, costs, holdings, and operating rules into one portfolio plan. Investigate a Damodaran strategy only when it informs a portfolio decision.
What you will learn
- Set a goal, an allocation, and a loss budget
- Evaluate business evidence and expected return
- Choose a passive core, or defend an active slice
How the course works
- 13 decisions build one portfolio plan
- Existing guided journeys earn mission credit
- Damodaran depth remains available without blocking progress
What you will build
- A diversified holdings and weighting plan
- Written execution, rebalancing, and sell rules
- A portfolio you can explain and monitor
13 decisions. One portfolio you can defend.
Build, explain, and operate a diversified long-term portfolio for a stated goal—or prove the same decisions in a realistic practice case—with written rules for readiness, allocation, security selection, costs, evidence, rebalancing, and mistakes.
Build your plan in decision order.
The first five missions reuse the strongest guided work already built. Later missions stay visible so the destination is always clear.
- 01Available40 min target2 source sessions: 1, 38
Set your goal and your limits
Who is this money for, and what could derail the plan?
Choose a personal or practice path, then state the goal, horizon, cash needs, readiness, loss capacity and behavioural limits the portfolio must respect.
Produces: Goal and limits - 02Available17 min target2 source sessions: 1, 7
Observe what markets actually do
What can you observe about markets, and what does it not prove?
Read three dated disclosures before seeing the price, and record one observation you could defend alongside what it does not establish.
Produces: Market observation note1 optional investigation - 03Available82 min target1 source session: 2
Price the risk in a bond
What can a bond do to you, and what would you pay for it?
Separate interest-rate risk from default risk, measure sensitivity with duration, and turn a credit view into a required yield.
Produces: Bond risk brief1 optional investigation - 04Available70 min target1 source session: 3
Set your equity risk policy
What can a stock do to you, and what return should you demand?
Define equity risk, read beta with its limits, choose the measures you rely on, and fix a price rule.
Produces: Equity risk policy3 optional investigations - 05Available45 min target4 source sessions: 1-3, 30
Set allocation and risk limits
How much goes where, and what loss is unacceptable?
Use a short portfolio-theory preflight, then set strategic weights, a liquidity bucket and a transparent stress-loss budget without treating a model as a personal answer.
Produces: Allocation and risk limits - 06Available100 min target1 source session: 4
Read the business evidence
What economic reality sits behind the ticker or the fund?
Connect the three statements, then read profitability, leverage and investor cash flow while keeping the candidate on a research-only watchlist.
Produces: Business evidence brief2 optional investigations - 07Available50 min target3 source sessions: 3-5
Estimate value and a decision range
What is it worth, and at what price would you act?
Build an internally consistent value range, cross-check it against peers, and save action and thesis-break rules without treating research as ownership.
Produces: Valuation and return range - 08Available35 min target1 source session: 6
Count the friction
What will acting actually cost you?
Quantify spread, price impact, the cost of waiting, turnover and tax drag before deciding how actively to trade.
Produces: Friction budget - 09Available40 min target3 source sessions: 1, 7-8
Judge a market-beating claim
How would you know if a strategy really works — including your own?
Apply event, portfolio and regression tests, name the cardinal sins that make backtests lie, then state the market belief those tests would have to survive.
Produces: Evidence test checklist and market belief - 10Available40 min target5 source sessions: 6-8, 35-36
Choose passive, or prove an edge
Is active risk justified for this investor?
Default to index funds unless an edge you could disprove survives the current base rate, evidence, friction, capacity, durability, size and thesis-break tests.
Produces: Index-or-edge decision - 11Available30 min target4 source sessions: 30, 32-34
Set a market-timing policy
Will you try to time the market?
Price the cost of being out of the market, then write a no-timing or explicitly bounded timing rule.
Produces: Timing policy - 12Available40 min target1 source session: 37
Choose the actual holdings
What do you actually buy?
Verify each product's exact identity, exposure, structure, fees, tracking, liquidity, source date and overlap, then rehearse an order without submitting it.
Produces: Holdings list - 13Available40 min target4 source sessions: 1, 6, 36, 38
Write the rules and defend the portfolio
How is this maintained, and why is it coherent for you?
Specify contribution, withdrawal, rebalance, tax-warning, sell and thesis-break rules, then pass a portfolio flight test and defend the whole policy.
Produces: Operating rules
Ready to begin?
Start by setting your goal and your limits, then let each decision update your plan.