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Portfolio Management Rules Created An Investing Champion

This week on the Investing with IBD podcast, George Tkaczuk joins the show. Tkaczuk is a portfolio manager at RCM Wealth Advisors and the 2020 winner of the U.S. Investing Championship in the $1 million+ money manager division. He shares how a chance encounter with Investor’s Business Daily gave him the portfolio management tools for investment success.

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Portfolio Management Rules Turned Him Into A U.S. Investing Champion

Tkaczuk didn’t start out in finance. He was in Las Vegas with a job in workman’s compensation when a co-worker got him interested in stocks. After sending away for a free trial of Investor’s Business Daily, he was hooked.

Still, he saw a lot of boom and bust cycles in his portfolio. That is until he discovered a big secret at IBD seminars given by IBD founder William J. O’Neil. George learned to use consistent portfolio management rules rather than using emotions and feelings.

After seeing strong gains in the 1990s evaporate to big losses, Tkaczuk found the portfolio management rule that made the biggest difference in his investment success. Cutting losses quickly.

He also got better with his chart-reading skills, position sizing rules, and market analysis. The persistence paid off. He got a job as a broker and eventually started managing other people’s money after demonstrating investing success.

Market Analysis: Selling Into Strength Kept Him Out Of Trouble

It’s not just about making the money, it’s also about keeping it. That’s where selling into strength can help. This was one of the things that helped Tkaczuk in his portfolio management for 2020. The start of the year was so strong, he decided to lock in some gains. Fortunately, that was right before the coronavirus stock market crash.

In the current market environment, the pullbacks are remaining mild, distribution days are light and the uptrend remains intact. For the last few months, many of the largest capitalization stocks in the market indexes are the stocks that are doing all the heavy lifting. Tkaczuk sees more participation from more stocks over the last few weeks.

After a strong bounce from the 50-day moving average line on Aug. 19, the Nasdaq composite is starting to look a little extended. That’s when Tkaczuk is careful to lock in some profits and not get aggressive at these levels. Plus some more sideways action in what he owns led him to back away on his exposure.

Portfolio Management Success Relies On Capturing Leaders

Tkaczuk wants to make sure he’s owning stocks with the potential to be market leaders. You can be wrong a lot of times and just a few big winners makes your portfolio much more forgiving of your mistakes. Here’s what’s on his radar now.

Nvidia Stock

The “usual suspects” remain in control of the current market. That includes Nvidia (NVDA) and Advanced Micro Devices (AMD), both of which are leaders in semiconductors.

As part of his portfolio management idea of selling into strength, Tkaczuk sold Nvidia stock into strength on a downside reversal June 18.

Once it formed a cup with handle, he waited for the earnings report to enter back into the position. The strong volume coming into the stock as it broke the downtrend of its handle is a compelling feature of the chart. Now he’s looking to potentially add on a pullback.

AMD Stock

AMD stock provides some good examples of looking back at previous areas of support and resistance. Tkaczuk noticed that AMD stock seemed to get support around 80 but just couldn’t seem to break above 100.

Areas of support and resistance are important to notice. Especially when the same levels can be seen further back on the chart. When AMD stock did break above the 100 level, the volume came in heavier by far. The move up to 122 was quick and selling some into strength was probably the wise choice. And while the move lower had heavy volume too, it wasn’t as heavy as the volume on the upside.

Now its hugging the 21-day moving average line in a constructive fashion.

Tesla Stock

Tesla (TSLA) was a big performer for Tkaczuk in 2020 and he doesn’t think the move is over. This was a stock that required some selling for portfolio management reasons just because of how much it appreciated. If he wasn’t careful, he says, the massive gains would have stretched the portfolio weight beyond Tkaczuk’s comfort zone.

When Tesla stock joined the S&P 500, the news and speculation sent the stock higher. Once it hit 695 it was reasonable to assume the move was over, but Tesla stock kept powering higher to 900. Then it fell all the way back down to 539. But that area around 700 proved to be important as well. Tesla stock started to tighten up and the moves to that level were followed by smaller and smaller pullbacks. Tkaczuk found the tight action compelling.

Down But Not Out

Unity Software (U) had a strong run at the end of 2020 but an equally dramatic drop. The Investing With IBD Podcast put it back on Tkaczuk’s radar. The story of their market share dominance was hard to pass up once the stock got back above its 200-day moving average line.

Want More? Use IBD Tools To Help Find The Next Nvidia Stock

For individual stock ideas, it’s always a good idea to check IBD’s Stock Lists page, especially the IBD 50 and IBD Big Cap 20, which both list Nvidia stock among their members. The IBD Breakout Stocks Index also provides a list of stocks worth tracking and both Nvidia stock and BLDR stock are on that list. is also IBD Big Cap 20.

The IBD Sector Leaders is also worth watching. It’s a select group with stringent criteria and Nvidia stock continues to earn a spot on the list.

And, of course, there are numerous articles on the best stocks to buy right now, updated regularly on investors.com for more investing ideas.

For new episodes of “Investing with IBD,” subscribe to our podcast on Apple PodcastsGoogle PodcastsSpotifyStitcher or your listening platform of choice.

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