An Opportunistic investment is one that rewards you for paying attention. It could be a data readout or quarterly business update that the rest of the market is likely to be overlooking. These investments are inherently short-term in nature, which can deliver meaty chunks of outperformance -- if you're right. When you're wrong, your hopes and dreams will rediscover gravity uncomfortably quickly.

As a rule, I only put money to work in an Opportunistic investment if I have strong conviction in realizing a double-digit return. These aren't coin flips. More important, I set strict exit levels. That means I'm happy to sell at a gain of 10% no questions asked and no getting cutesy (getting cute = "yeah, well maybe 15% now"). We've all been there. But that's the other part of identifying a quick opportunity: emotionless selling so you don't f*nch up the win.

A Current Compounder is a lower-risk investment. These aren't precommercial drug developers endlessly burning through cash. These are picks and shovels providers, diagnostics companies, or commercial-stage drug developers. They have operating cash flow and are near or at profitable operations. I don't expect Current Compounders to drive my portfolio's returns, but they provide protection against volatility. These are the dad sneakers of investing. Pragmatic, not flashy.

Your allocation to Current Compounder positions depends on your age, your conviction in each opportunity, and maybe even the individual portfolio itself. However, the finch recommends that even aggressive portfolios include an allocation of at least 20% to stable-and-steady businesses. Who knows, if you're lucky, businesses with healthy operations are usually above-average acquisition targets.