The Pure Quant portfolio builder can help you create a diversified, risk-balanced portfolio.

You’ll access Pure Quant under the Invest menu.

To access the Pure Quant tool, go to the Pure Quant tab on the Invest page, at the top navigational header.

On the home screen of the Pure Quant tool, you’ll see a clear record of all the portfolios you’ve previously built.

Each entry shows the date and time created, the source(s) you used, the filters applied (tool settings), your investment amount, and the number of positions. The Status column indicates the tool’s progress in building your portfolio. 

If you’d like to revisit a past portfolio, click the date and time link to review the results. Please note that these results are static and will not update automatically. If you want refreshed outcomes, you can re-run Pure Quant using the same parameters—sources, filters, investment amount, and number of positions.   

When you’re ready to build a new portfolio, select the Build New Pure Quant Portfolio button.

You can also click Choose model portfolio to view pre-built model portfolios.

Let's continue as if we were building our portfolio from scratch.

There are three simple steps to build your portfolio.

Step 1: Choose your sources

First, you’ll need to choose your sources. As you can see, there are numerous sources to choose from, including TradeSmith Billionaire's Club, newsletters, baskets, markets, sectors, and more.

• The Billionaire’s Club – We track approximately 40 billionaires.
• Newsletters – Select the newsletters to which you’re subscribed.
• Model Portfolios – Automated portfolios developed for various investment strategies. 
• TradeSmith Baskets – Use pre-built baskets or manually created baskets.   
• • A basket is simply a collection of securities you want to follow regularly for trade or investment opportunities. 
• Markets – Build a portfolio using securities from the major U.S. and international markets we track. 
• Sectors – Focus on the underlying sector ETFs to capture sector-specific performance. 
• Country of Exchange – Limit your portfolio to securities from the U.S., U.K., Canada, or Australia. 
• Asset Type – Choose your preferred type: stocks, crypto, indexes, funds, and more. 
• Individual Securities – Add tickers directly to ensure the tool includes them, regardless of its rules. 
• Portfolios & Watchlists – Draw directly from the portfolios and watchlists you track in TradeSmith Finance. 
• ETFs and Mutual Funds – Include ETFs or mutual funds—or even their underlying components. 
• • The tool does not include ETFs, funds, or their components if they don’t meet Pure Quant’s rules. 
• Saved Invest Screener – Select from your saved screeners to build a portfolio. (Requires access to the Screener tool.) 

In short, Pure Quant gives you the freedom to mix and match sources, whether you prefer guru portfolios, your newsletters, baskets you’ve curated, or broader market-based inputs. 

One more step: tell the tool how to combine these choices. Use the Sources Combination toggle at the top—select All to require that results meet every selected criterion (example: newsletter picks that are U.S. and stocks). Choose Any if you’re comfortable with a broader set that matches any of your selected sources (example: newsletter picks may be U.S. and U.K. stocks).

Once you’ve made your source selections and adjusted the sources combination feature, go to Step 2.

Step 2: Change default Settings

1) Health (Long-Term): Green Zone. 

2) Average VQ for Stocks: 40% or less 

3) Average VQ for Cryptos: 80% or less. 

4) Gains: securities must be at a positive gain since they triggered the Health Indicator Entry Signal. 

5) 1-Year Average Volume: US stocks must have an average daily volume of at least 100,000 shares or more.

6) 1-Year Average Daily Volume: US stocks must have an average daily volume in price of $2 million or greater. 

7) Maximize Diversification: minimize portfolio risk through weakly correlated securities. 

As you know, volatility is related to returns. However, we also don’t want to take on that risk. We found a way to minimize portfolio risk by utilizing weakly correlated securities, meaning they do not move in tandem - up or down in the market. 

When your portfolio is diversified, you can have securities with higher volatility from different sectors and still have a portfolio with a lower overall risk. 

8) Market capitalization: refers to the total dollar market value of a company’s outstanding shares of stock. 

• Mega Cap = $200 Billion or more 
• Large Cap = $10 Billion to $200 Billion 
• Mid Cap = $2 Billion to $10 Billion 
• Small Cap = $300 Million to $2 Billion 
• Micro Cap = $50 Million to $300 Million 
• Nano Cap = Less than $50 Million 

You can change any of these defaults if you’d like. 

Step 3: Customize portfolio

You can click on the Customize Portfolio button at the bottom of the page or scroll to the top and click Step 3. 

In Step 3, you tell the program how much you’d like to invest in this new portfolio and how many positions you’d like to have.

You can use the drop-down to select a different currency.  In the two text boxes, you can edit how much you’d like to invest and the number of positions you’d like to have.

For a well-balanced portfolio, we typically recommend holding between 10 and 20 positions—enough to diversify risk without spreading yourself too thin. 

At any point, if you want to revisit earlier choices, click back to the step you’d like to adjust. 

Before we press the Build Portfolio button, there’s one last feature in Step 3 to review. 

Here, you can allocate percentages of your investment across different asset types. 

When you’re ready, click Build Portfolio. 

The Pure Quant tool will display a progress bar as it processes each step. You can keep using the site while it runs, and you’ll get a notification as soon as your results are ready. 

Let's check out our results!

At the top of your results, you’ll see a snapshot of your portfolio: total value, cash, Diversification Quotient (DQ), Portfolio Volatility Quotient (PVQ), health distribution, and number of positions. 

Since the Pure Quant portfolio is designed to stay fully invested, you won’t see any leftover cash sitting on the sidelines. 

The DQ score tells you how well your portfolio is diversified. Think of it as a measure of how many “different baskets” your eggs are in: 

• 1 – 1.5 = Weak diversification 
• 1.5 – 2 = Moderate diversification 
• 2 or higher = Strong diversification (this is what we aim for) 

Our system gets there by combining stocks from different sectors that don’t move in lockstep. Even if individual stocks are a bit more volatile, the mix helps reduce overall risk. 

The PVQ score shows your portfolio’s overall risk level. In this example, the PVQ is 14.29%, which is considered fairly low. For reference, anything up to 15% is seen as low risk. 

When reviewing your results, remember that these positions are not ranked by “best pick.” 

Securities that recently triggered a new Health Entry Signal usually appear higher on the list. However, placement also depends on the Pure Quant formula, which takes into account a security’s average VQ. Our research shows that stocks with a higher average VQ% have generally outperformed those with a lower VQ%. 

Image as of Nov. 20, 2025.

It’s important to emphasize that TradeSmith recommends equal-risk position sizing, as reflected in the Risk% per Position column. In practice, this means we allocate the same percentage of our $100,000 trading capital to risk on each trade—not the same dollar amount invested in every holding. 

As shown in the Position Size columns, the actual dollar investment varies depending on the risk profile of each security. Typically, you’ll see larger allocations to lower-risk securities, which are more likely to deliver consistent returns over time, and smaller allocations to higher-risk positions. 

For example, consider IBM (IBM) and EcoStar Corp. (SATS). SATS carries a very high Volatility Quotient (VQ) of about 43%, whereas IBM's risk level is significantly lower, at around 16%. Based on these risk profiles, the tool suggests allocating roughly $6k to the high-risk stock, compared with $15k in the more stable, conservative stock. 

What to do next. 

• Validate each pick against your trade plan. 
  Before placing any orders with your broker, confirm that every security fits your criteria—entry, position size, time horizon, risk, and exit rules.
• Open the Asset Details page for deeper due diligence. 
  Click any ticker to jump to its Asset Details page, where you can review key indicators, statistics, company profile, financials, charts, and more. 
• Save your list for tracking. 
  Save the results as a new or existing basket (watchlist) or as a new or existing portfolio (positions you plan to track or manage). 
• Print or export as needed. 
  Use the Print and Export buttons in the upper-right corner of the page to share or archive your results. 

*Note—The tabs and features you see on your TradeSmith Finance site will vary based on your subscription(s) and subscription level(s). The pictures in our Education Center articles are taken from a TradeSmith Platinum account.