portfolio-manager

SKILL.md

Portfolio Manager

Overview

Analyze and manage investment portfolios by integrating with Alpaca MCP Server to fetch real-time holdings data, then performing comprehensive analysis covering asset allocation, diversification, risk metrics, individual position evaluation, and rebalancing recommendations. Generate detailed portfolio reports with actionable insights.

This skill leverages Alpaca's brokerage API through MCP (Model Context Protocol) to access live portfolio data, ensuring analysis is based on actual current positions rather than manually entered data.

When to Use
Invoke this skill when the user requests:

"Analyze my portfolio"

"Review my current positions"

"What's my asset allocation?"

"Check my portfolio risk"

"Should I rebalance my portfolio?"

"Evaluate my holdings"

"Portfolio performance review"

"What stocks should I buy or sell?"

Any request involving portfolio-level analysis or management

Prerequisites

Alpaca MCP Server Setup

This skill requires Alpaca MCP Server to be configured and connected. The MCP server provides access to:

Current portfolio positions

Account equity and buying power

Historical positions and transactions

Market data for held securities

MCP Server Tools Used:

get_account_info - Fetch account equity, buying power, cash balance

get_positions - Retrieve all current positions with quantities, cost basis, market value

get_portfolio_history - Historical portfolio performance data

Market data tools for price quotes and fundamentals

If Alpaca MCP Server is not connected, inform the user and provide setup instructions from references/alpaca_mcp_setup.md.

Workflow

Step 1: Fetch Portfolio Data via Alpaca MCP

Use Alpaca MCP Server tools to gather current portfolio information:

1.1 Get Account Information:

Use mcp__alpaca__get_account_info to fetch:
- Account equity (total portfolio value)
- Cash balance
- Buying power
- Account status

1.2 Get Current Positions:

Use mcp__alpaca__get_positions to fetch all holdings:
- Symbol ticker
- Quantity held
- Average entry price (cost basis)
- Current market price
- Current market value
- Unrealized P&L ($ and %)
- Position size as % of portfolio

1.3 Get Portfolio History (Optional):

Use mcp__alpaca__get_portfolio_history for performance analysis:
- Historical equity values
- Time-weighted return calculation
- Drawdown analysis

Data Validation:

Verify all positions have valid ticker symbols

Confirm market values sum to approximate account equity

Check for any stale or inactive positions

Handle edge cases (fractional shares, options, crypto if supported)

Step 2: Enrich Position Data

For each position in the portfolio, gather additional market data and fundamentals:

2.1 Current Market Data:

Real-time or delayed price quotes

Daily volume and liquidity metrics

52-week range

Market capitalization

2.2 Fundamental Data:
Use WebSearch or available market data APIs to fetch:

Sector and industry classification

Key valuation metrics (P/E, P/B, dividend yield)

Recent earnings and financial health indicators

Analyst ratings and price targets

Recent news and material developments

2.3 Technical Analysis:

Price trend (20-day, 50-day, 200-day moving averages)

Relative strength

Support and resistance levels

Momentum indicators (RSI, MACD if available)

Step 3: Portfolio-Level Analysis

Perform comprehensive portfolio analysis using frameworks from reference files:

3.1 Asset Allocation Analysis

Read references/asset-allocation.md for allocation frameworks

Analyze current allocation across multiple dimensions:

By Asset Class:

Equities vs Fixed Income vs Cash vs Alternatives

Compare to target allocation for user's risk profile

Assess if allocation matches investment goals

By Sector:

Technology, Healthcare, Financials, Consumer, etc.

Identify sector concentration risks

Compare to benchmark sector weights (e.g., S&P 500)

By Market Cap:

Large-cap vs Mid-cap vs Small-cap distribution

Concentration in mega-caps

Market cap diversification score

By Geography:

US vs International vs Emerging Markets

Domestic concentration risk assessment

Output Format:

## Asset Allocation

### Current Allocation vs Target
| Asset Class | Current | Target | Variance |
|-------------|---------|--------|----------|
| US Equities | XX.X% | YY.Y% | +/- Z.Z% |
| ... |

### Sector Breakdown
[Pie chart description or table with sector percentages]

### Top 10 Holdings
| Rank | Symbol | % of Portfolio | Sector |
|------|--------|----------------|--------|
| 1 | AAPL | X.X% | Technology |
| ... |

3.2 Diversification Analysis

Read references/diversification-principles.md for diversification theory

Evaluate portfolio diversification quality:

Position Concentration:

Identify top holdings and their aggregate weight

Flag if any single position exceeds 10-15% of portfolio

Calculate Herfindahl-Hirschman Index (HHI) for concentration measurement

Sector Concentration:

Identify dominant sectors

Flag if any sector exceeds 30-40% of portfolio

Compare to benchmark sector diversity

Correlation Analysis:

Estimate correlation between major positions

Identify highly correlated holdings (potential redundancy)

Assess true diversification benefit

Number of Positions:

Optimal range: 15-30 stocks for individual portfolios

Flag if under-diversified (<10 stocks) or over-diversified (>50 stocks)

Output:

## Diversification Assessment

**Concentration Risk:** [Low / Medium / High]
- Top 5 holdings represent XX% of portfolio
- Largest single position: [SYMBOL] at XX%

**Sector Diversification:** [Excellent / Good / Fair / Poor]
- Dominant sector: [Sector Name] at XX%
- [Assessment of balance across sectors]

**Position Count:** [Optimal / Under-diversified / Over-diversified]
- Total positions: XX stocks
- [Recommendation]

**Correlation Concerns:**
- [List any highly correlated position pairs]
- [Diversification improvement suggestions]

3.3 Risk Analysis

Read references/portfolio-risk-metrics.md for risk measurement frameworks

Calculate and interpret key risk metrics:

Volatility Measures:

Estimated portfolio beta (weighted average of position betas)

Individual position volatilities

Portfolio standard deviation (if historical data available)

Downside Risk:

Maximum drawdown (from portfolio history)

Current drawdown from peak

Positions with significant unrealized losses

Risk Concentration:

Percentage in high-volatility stocks (beta > 1.5)

Percentage in speculative/unprofitable companies

Leverage usage (if applicable)

Tail Risk:

Exposure to potential black swan events

Single-stock concentration risk

Sector-specific event risk

Output:

## Risk Assessment

**Overall Risk Profile:** [Conservative / Moderate / Aggressive]

**Portfolio Beta:** X.XX (vs market at 1.00)
- Interpretation: Portfolio is [more/less] volatile than market

**Maximum Drawdown:** -XX.X% (from $XXX,XXX to $XXX,XXX)
- Current drawdown from peak: -XX.X%

**High-Risk Positions:**
| Symbol | % of Portfolio | Beta | Risk Factor |
|--------|----------------|------|-------------|
| [TICKER] | XX% | X.XX | [High volatility / Recent loss / etc] |

**Risk Concentrations:**
- XX% in single sector ([Sector])
- XX% in stocks with beta > 1.5
- [Other concentration risks]

**Risk Score:** XX/100 ([Low/Medium/High] risk)

3.4 Performance Analysis

Evaluate portfolio performance using available data:

Absolute Returns:

Overall portfolio unrealized P&L ($ and %)

Best performing positions (top 5 by % gain)

Worst performing positions (bottom 5 by % loss)

Time-Weighted Returns (if history available):

YTD return

1-year, 3-year, 5-year annualized returns

Compare to benchmark (S&P 500, relevant index)

Position-Level Performance:

Winners vs Losers ratio

Average gain on winning positions

Average loss on losing positions

Positions near 52-week highs/lows

Output:

## Performance Review

**Total Portfolio Value:** $XXX,XXX
**Total Unrealized P&L:** $XX,XXX (+XX.X%)
**Cash Balance:** $XX,XXX (XX% of portfolio)

**Best Performers:**
| Symbol | Gain | Position Value |
|--------|------|----------------|
| [TICKER] | +XX.X% | $XX,XXX |
| ... |

**Worst Performers:**
| Symbol | Loss | Position Value |
|--------|------|----------------|
| [TICKER] | -XX.X% | $XX,XXX |
| ... |

**Performance vs Benchmark (if available):**
- Portfolio return: +X.X%
- S&P 500 return: +Y.Y%
- Alpha: +/- Z.Z%

Step 4: Individual Position Analysis

For key positions (top 10-15 by portfolio weight), perform detailed analysis:

Read references/position-evaluation.md for position analysis framework

For each significant position:

4.1 Current Thesis Validation:

Why was this position initiated? (if known from user context)

Has the investment thesis played out or broken?

Recent company developments and news

4.2 Valuation Assessment:

Current valuation metrics (P/E, P/B, etc.)

Compare to historical valuation range

Compare to sector peers

Overvalued / Fair / Undervalued assessment

4.3 Technical Health:

Price trend (uptrend, downtrend, sideways)

Position relative to moving averages

Support and resistance levels

Momentum status

4.4 Position Sizing:

Current weight in portfolio

Is size appropriate given conviction and risk?

Overweight or underweight vs optimal

4.5 Action Recommendation:

HOLD - Position is well-sized and thesis intact

ADD - Underweight given opportunity, thesis strengthening

TRIM - Overweight or valuation stretched

SELL - Thesis broken, better opportunities elsewhere

Output per position:

### [SYMBOL] - [Company Name] (XX.X% of portfolio)

**Position Details:**
- Shares: XXX
- Avg Cost: $XX.XX
- Current Price: $XX.XX
- Market Value: $XX,XXX
- Unrealized P/L: $X,XXX (+XX.X%)

**Fundamental Snapshot:**
- Sector: [Sector]
- Market Cap: $XX.XB
- P/E: XX.X | Dividend Yield: X.X%
- Recent developments: [Key news or earnings]

**Technical Status:**
- Trend: [Uptrend / Downtrend / Sideways]
- Price vs 50-day MA: [Above/Below by XX%]
- Support: $XX.XX | Resistance: $XX.XX

**Position Assessment:**
- **Thesis Status:** [Intact / Weakening / Broken / Strengthening]
- **Valuation:** [Undervalued / Fair / Overvalued]
- **Position Sizing:** [Optimal / Overweight / Underweight]

**Recommendation:** [HOLD / ADD / TRIM / SELL]
**Rationale:** [1-2 sentence explanation]

Step 5: Rebalancing Recommendations

Read references/rebalancing-strategies.md for rebalancing approaches

Generate specific rebalancing recommendations:

5.1 Identify Rebalancing Triggers:

Positions that have drifted significantly from target weights

Sector/asset class allocations requiring adjustment

Overweight positions to trim (exceeded threshold)

Underweight areas to add (below threshold)

Tax considerations (capital gains implications)

5.2 Develop Rebalancing Plan:

Positions to TRIM:

Overweight positions (>threshold deviation from target)

Stocks that have run up significantly (valuation concerns)

Concentrated positions exceeding 15-20% of portfolio

Positions with broken thesis

Positions to ADD:

Underweight sectors or asset classes

High-conviction positions currently underweight

New opportunities to improve diversification

Cash Deployment:

If excess cash (>10% of portfolio), suggest deployment

Prioritize based on opportunity and allocation gaps

5.3 Prioritization:
Rank rebalancing actions by priority:

Immediate - Risk reduction (trim concentrated positions)

High Priority - Major allocation drift (>10% from target)

Medium Priority - Moderate drift (5-10% from target)

Low Priority - Fine-tuning and opportunistic adjustments

Output:

## Rebalancing Recommendations

### Summary
- **Rebalancing Needed:** [Yes / No / Optional]
- **Primary Reason:** [Concentration risk / Sector drift / Cash deployment / etc]
- **Estimated Trades:** X sell orders, Y buy orders

### Recommended Actions

#### HIGH PRIORITY: Risk Reduction
**TRIM [SYMBOL]** from XX% to YY% of portfolio
- **Shares to Sell:** XX shares (~$XX,XXX)
- **Rationale:** [Overweight / Valuation extended / etc]
- **Tax Impact:** $X,XXX capital gain (est)

#### MEDIUM PRIORITY: Asset Allocation
**ADD [Sector/Asset Class]** exposure
- **Target:** Increase from XX% to YY%
- **Suggested Stocks:** [SYMBOL1, SYMBOL2, SYMBOL3]
- **Amount to Invest:** ~$XX,XXX

#### CASH DEPLOYMENT
**Current Cash:** $XX,XXX (XX% of portfolio)
- **Recommendation:** [Deploy / Keep for opportunities / Reduce to X%]
- **Suggested Allocation:** [Distribution across sectors/stocks]

### Implementation Plan
1. [First action - highest priority]
2. [Second action]
3. [Third action]
...

**Timing Considerations:**
- [Tax year-end planning / Earnings season / Market conditions]
- [Suggested phasing if applicable]

Step 6: Generate Portfolio Report

Create comprehensive markdown report saved to repository root:

Filename: portfolio_analysis_YYYY-MM-DD.md

Report Structure:

# Portfolio Analysis Report

**Account:** [Account type if available]
**Report Date:** YYYY-MM-DD
**Portfolio Value:** $XXX,XXX
**Total P&L:** $XX,XXX (+XX.X%)

---

## Executive Summary

[3-5 bullet points summarizing key findings]
- Overall portfolio health assessment
- Major strengths
- Key risks or concerns
- Primary recommendations

---

## Holdings Overview

[Summary table of all positions]

---

## Asset Allocation
[Section from Step 3.1]

---

## Diversification Analysis
[Section from Step 3.2]

---

## Risk Assessment
[Section from Step 3.3]

---

## Performance Review
[Section from Step 3.4]

---

## Position Analysis
[Detailed analysis of top 10-15 positions from Step 4]

---

## Rebalancing Recommendations
[Section from Step 5]

---

## Action Items

**Immediate Actions:**
- [ ] [Action 1]
- [ ] [Action 2]

**Medium-Term Actions:**
- [ ] [Action 3]
- [ ] [Action 4]

**Monitoring Priorities:**
- [ ] [Watch list item 1]
- [ ] [Watch list item 2]

---

## Appendix: Full Holdings

[Complete table with all positions and metrics]

Step 7: Interactive Follow-up

Be prepared to answer follow-up questions:

Common Questions:

"Why should I sell [SYMBOL]?"

Explain specific concerns (valuation, thesis breakdown, concentration)

Provide supporting data

Offer alternative positions if applicable

"What should I buy instead?"

Suggest specific stocks to improve allocation

Explain how they address portfolio gaps

Provide brief investment thesis

"What's my biggest risk?"

Identify primary risk factor (concentration, sector exposure, volatility)

Quantify the risk

Suggest mitigation strategies

"How does my portfolio compare to [benchmark]?"

Compare allocation, sector weights, risk metrics

Highlight key differences

Assess if differences are justified

"Should I rebalance now or wait?"

Consider market conditions, tax implications, transaction costs

Provide timing recommendation with rationale

"Can you analyze [specific position] in more detail?"

Perform deep-dive analysis using us-stock-analysis skill if needed

Integrate findings back into portfolio context

Analysis Frameworks

Target Allocation Templates

This skill includes reference allocation models for different investor profiles:

Read references/target-allocations.md for detailed models:

Conservative (Capital preservation, income focus)

Moderate (Balanced growth and income)

Growth (Long-term capital appreciation)

Aggressive (Maximum growth, high risk tolerance)

Each model includes:

Asset class targets (Stocks/Bonds/Cash/Alternatives)

Sector guidelines

Market cap distribution

Geographic allocation

Position sizing rules

Use these as comparison benchmarks when user hasn't specified their allocation strategy.

Risk Profile Assessment

If user's target allocation is unknown, assess appropriate risk profile based on:

Age (if mentioned)

Investment timeline (if mentioned)

Current allocation (reveals preferences)

Position types (conservative vs speculative stocks)

Read references/risk-profile-questionnaire.md for assessment framework

Output Guidelines

Tone and Style:

Objective and analytical

Actionable recommendations with clear rationale

Acknowledge uncertainty in market forecasts

Balance optimism with risk awareness

Quantify whenever possible

Data Presentation:

Tables for comparisons and metrics

Percentages for allocations and returns

Dollar amounts for absolute values

Consistent formatting throughout report

Recommendation Clarity:

Explicit action verbs (TRIM, ADD, HOLD, SELL)

Specific quantities (sell XX shares, add $X,XXX)

Priority levels (Immediate, High, Medium, Low)

Supporting rationale for each recommendation

Visual Descriptions:

Describe allocation breakdowns as if creating pie charts

Sector weights as bar chart equivalents

Performance trends with directional indicators (↑ ↓ →)

Reference Files

Load these references as needed during analysis:

references/alpaca-mcp-setup.md

When: User needs help setting up Alpaca MCP Server

Contains: Installation instructions, API key configuration, MCP server connection steps, troubleshooting

references/asset-allocation.md

When: Analyzing portfolio allocation or creating rebalancing plan

Contains: Asset allocation theory, optimal allocation by risk profile, sector allocation guidelines, rebalancing triggers

references/diversification-principles.md

When: Assessing portfolio diversification quality

Contains: Modern portfolio theory basics, correlation concepts, optimal position count, concentration risk thresholds, diversification metrics

references/portfolio-risk-metrics.md

When: Calculating risk scores or interpreting volatility

Contains: Beta calculation, standard deviation, Sharpe ratio, maximum drawdown, Value at Risk (VaR), risk-adjusted return metrics

references/position-evaluation.md

When: Analyzing individual holdings for buy/hold/sell decisions

Contains: Position analysis framework, thesis validation checklist, position sizing guidelines, sell discipline criteria

references/rebalancing-strategies.md

When: Developing rebalancing recommendations

Contains: Rebalancing methodologies (calendar-based, threshold-based, tactical), tax optimization strategies, transaction cost considerations, implementation timing

references/target-allocations.md

When: Need benchmark allocations for comparison

Contains: Model portfolios for conservative/moderate/growth/aggressive investors, sector target ranges, market cap distributions

references/risk-profile-questionnaire.md

When: User hasn't specified risk tolerance or target allocation

Contains: Risk assessment questions, scoring methodology, risk profile classification

Error Handling

If Alpaca MCP Server is not connected:

Inform user that Alpaca integration is required

Provide setup instructions from references/alpaca-mcp-setup.md

Offer alternative: manual data entry (less ideal, user provides CSV of positions)

If API returns incomplete data:

Proceed with available data

Note limitations in report

Suggest manual verification for missing positions

If position data seems stale:

Flag the issue

Recommend refreshing connection or checking Alpaca status

Proceed with analysis but caveat findings

If user has no positions:

Acknowledge empty portfolio

Offer portfolio construction guidance instead of analysis

Suggest using value-dividend-screener or us-stock-analysis for stock ideas

Advanced Features

Tax-Loss Harvesting Opportunities

Identify positions with unrealized losses suitable for tax-loss harvesting:

Positions with losses >5%

Holding period considerations (avoid wash sale rule)

Replacement security suggestions (similar but not substantially identical)

Dividend Income Analysis

For portfolios with dividend-paying stocks:

Estimate annual dividend income

Dividend growth rate trajectory

Dividend coverage and sustainability

Yield on cost for long-term holdings

Correlation Matrix

For portfolios with 5-20 positions:

Estimate correlation between major positions

Identify redundant positions (correlation >0.8)

Suggest diversification improvements

Scenario Analysis

Model portfolio behavior under different scenarios:

Bull Market (+20% equity appreciation)

Bear Market (-20% equity decline)

Sector Rotation (Tech weakness, Value strength)

Rising Rates (Impact on growth stocks and bonds)

Example Queries

Basic Portfolio Review:

"Analyze my portfolio"

"Review my positions"

"How's my portfolio doing?"

Allocation Analysis:

"What's my asset allocation?"

"Am I too concentrated in tech?"

"Show me my sector breakdown"

Risk Assessment:

"Is my portfolio too risky?"

"What's my portfolio beta?"

"What are my biggest risks?"

Rebalancing:

"Should I rebalance?"

"What should I buy or sell?"

"How can I improve diversification?"

Performance:

"What are my best and worst positions?"

"How am I performing vs the market?"

"Which stocks are winning and losing?"

Position-Specific:

"Should I sell [SYMBOL]?"

"Is [SYMBOL] overweight in my portfolio?"

"What should I do with [SYMBOL]?"

Limitations and Disclaimers

Include in all reports:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances, risk tolerance, and financial goals. Past performance does not guarantee future results. Consult with a qualified financial advisor before making investment decisions.

Data accuracy depends on Alpaca API and third-party market data sources. Verify critical information independently. Tax implications are estimates only; consult a tax professional for specific guidance.
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