Pillar guide · 11 modules · 2 paths

Portfolio construction and execution

Picking good stocks is a small part of investing. How you combine them, how much capital each position gets, when you rebalance, how you measure whether you are actually beating the benchmark, and how you execute without bleeding to slippage. That is the craft. This pillar covers it end to end.

Building the portfolio

Portfolio construction is the decision layer between strategy selection and live capital. Even if you have a perfect stock selection rule, a portfolio that sizes positions badly or rebalances on a bad schedule will underperform a portfolio that picks worse names with better construction. The math here is not optional.

Path 4 · Module 1

Modern Portfolio Theory

Mean variance optimisation, efficient frontier, Markowitz framework. What still works and what does not.

Path 4 · Module 2

Position sizing

Equal weight, market cap, inverse volatility, risk parity. Which to pick when.

Path 4 · Module 3

Rebalancing strategies

Calendar based vs threshold based. Frequency tradeoffs. Tax drag in Indian equity.

Path 4 · Module 4

Performance measurement

CAGR, IRR, Sharpe, Sortino, max drawdown. What each tells you and what it hides.

Path 4 · Module 5

Risk management

Volatility targeting, drawdown control, stop-loss rules that do not hurt more than they help.

Executing in live markets

A strategy that looks great in backtest can lose 2 or 3 percent a year to bad execution. Slippage, market impact, timing of orders, broker API quirks. Path 10 is about the gap between clean simulation and messy reality.

Path 10 · Module 1

How orders actually work: market microstructure in India

Order books, matching engines, tick size, pre-open, auction periods.

Path 10 · Module 2

The real cost of trading: slippage and transaction costs

Bid-ask spread, market impact, STT, GST, brokerage, exchange charges.

Path 10 · Module 3

Systematic execution: APIs, algos, SEBI rules

Broker APIs, algo approval, SEBI co-location rules, order throttling.

Path 10 · Module 4

Paper trading to live: the hardest transition

Why backtests lie to you and what to do about it before putting real money down.