I have 90% of my capital in indexes and the rest in 3 biotec companies that hopefully will ignite soon. I try to sell a little on local tops (overbought) and buy a little on oversold. To find these tops/bottoms I use standard deviation calc.
That sounds like a good plan. You are finding good places to buy and sell. This perpetual bull market makes the ride enjoyable, taking profits along the way and fortifying ones position. However, I have not tested your method or looked at it in a bear market. It's all about what fits. As you know Investing is a long term approach to macro events. It's those mini events that can cause bad decisions. May you find that smooth upward sloping equity line. MB
If anybody needs to verify the results of this portfolio, just click on the link at the bottom. There are currently 24 holdings in 6 slices. 10% Bonds < 3 Mo's +0.07% 10% Bonds 3-6 Mo's +0.10% 10% Bonds 6-18 Mo's +0.09% 10% Bonds > 18 Mo's +0.48% 30% 7 Aristocrats -1.77% 30% Best Stocks Now +0.80% This portfolio is outperforming the S&P 500 by 3.42% from it's inception 9 days ago (05/22/2019). https://m1.finance/h_ePIttQh
Friday (the last day of May 2019) there was sell-off after President Donald Trump revealed plans to use tariffs to compel Mexico to make efforts to stop the flow of illegal immigrants across the country and into the U.S. Every "sell-off" in the market for the last 10 years has been a buying opportunity. The bond market will force the Fed to cut interest rates. (Look at WDRW, no inverse positions are currently held in this portfolio). Remember this portfolio does not close its eyes to holding inverse positions. We have almost made it to 3k in the S & P (Look at the rounding pattern in the 6 mo. S & P chart). Stick with stocks with highly ranked value, momentum and safety. There is a lot of money changing hands and many traders are invested. Remember value is not created between competing traders and investors. May all of us Champagne Stockaholics bubble to the top!
Since 2007 Investors are increasingly investing in US stock market index funds and stock funds are decreasing. Numbers do not lie. Indexes must rebalance with this influx of money. So some stocks just go up for no apparent reason. Imagine picking stocks that outperform for other reasons. If you pick the best stocks now you can outperform. (hint: rank valuation, momentum and safety every day). Ask yourself this question...Do I want a smooth upward sloping equity curve...or a choppy one yielding more? If you choose the smooth one then you must evaluate risk. From 9:30-16:00 est (27% of a 24 hour period) the indexes are trading...then the rest of the world trades! Think about it. Do not ignore this and keep a chart of the Gaps. This volatile market lends itself to stock pickers. In a bear market indexes can lose more... faster, YES because they are 100% invested. This portfolio is beating the S & P and is increasing the positive gap of outperformance steadily in its first 9 days. Is it because of me?....maybe....but I utilize two subscription services. I use these services in a unique combination and the authors have not backtested what I do. Earnings and expected earnings drive this market. MB. Please do not misunderstand the bragging. This portfolio is down 0.23% from inception. BUT THIS PORTFOLIO IS BEATING THE S & P THUS FAR....YEAH!
Folks, I tried ETF investing in another Stockaholics thread (see link below). But I had to end that thread as it could not beat the S&P. Don't get me wrong...In this new thread I will use inverse ETF's in case it pops up in a scan and hold it as long as they rank high with value, momentum & safety. The scan usually signals a turn in a sector or an international ETF. Perhaps a 3 times ETF by proshares will show up in the S & P inverse or forward...sheeesh. I do not know how to hold a three times ETF and I think there is a method to rebalance to hold its backwardation drag. https://stockaholics.net/threads/m1-finance.8115/
I am pleased to announce that I can fully validate this portfolio by linking you to the portfolio (click the link below). Enjoy and lets outperform the S & P. Here is the link: https://m1.finance/h_ePIttQh If you choose to invest in this portfolio, please start with just $100.00 and understand you can lose. I am not an investment adviser. I am just a retail investor sharing my trades with 5 years left. I figure if I can outperform the S & P with 40% in Segmented Bonds... then over the next 5 years I will have a chance to increase my capital no matter what the market does. My speculative nature is satisfied with this portfolio (30%). I also hold some awesome Aristocrats (30%).
I have been looking at this chart for days now. It's easy to see in hindsight. I cannot seem to learn how to interpret the far right edge other than the 50MA of the VIX is going up or down for the moment. I make the chart big but it is some sort of mental block that I have. I even held a piece of paper over the left part of the chart to pretend I was viewing the chart live. I am more of a fundamental trader than a chart reader. This is my problem not yours...and thanks for posting and I am sure others have benefited from your post. Please post more of your insights for our edification.
It's a problem with using Moving Averages in general. They lag the data by 1/2 of their period. For example, the 50-day MA is 25 days old. Yet the conventional way of plotting is to assume the last point on the line is current. It's not. A 50-day MA should be plotted 25 days previous. Using the VIX example, here is the conventional way to plot the 50-day MA: But below is how it should be plotted with an offset 25 days into the past so that each point on the line represents 25 prices before it and 25 prices after it: There is an interesting mathematical phenomenon that is sometimes useful. If you combine 2 moving averages with one twice the length of the other, say the 50- and 100-day MAs both offset by 1/2 their respective periods, then where they cross is exactly 1/2 the move in amplitude and time of the shorter MA. It is useful because knowing where they cross allows you to predict when the up- or down-cycle has ended for the shorter MA. The problem is though, that you have to assume an extension for the longer MA to find that cross over. Another problem is that they both might start trending...the MA's run together. JM Hurst has a book on this topic. He was a cycle guy back in the 1960s when cycle analysis worked, when the market was allowed to be cyclical. Of course now we have a centralized economy vis-a-vis, the Fed.
Congrats on beating the S&P! One big way of beating the S&P is to not lose as much when it goes down. This may seem like I'm not saying much, but a lot of people try to inverse the S&P when they think it's about to start going downward. It's kind of an arrogant thing to try; maybe the best thing to do, considering risk, is to just go to cash and out of stocks. That'll beat the market when it pulls back, yet if it goes up you don't lose a ton of alpha. Quoting your message about the monthly timing here too because it's a similar idea: beware that the most gains are made November-April, does not mean May-October are losers. So far this year May indeed was a loser. But a lot of years, if you sold in May, you ended up buying back in November at a higher price. Each year has its own context.
ada, Thanks for your insights. In my scans an inverse entry can show up high in the ranks and only in that case would I go short (long the inverse instrument). I agree, It is impossible to time the market perfectly. The scan usually signals a turn in a sector or an international ETF. Perhaps a 3 times ETF by proshares will show up in the S & P inverse or forward...sheeesh. I do not know how to hold a three times ETF and I think there is a method to rebalance to hold its backwardation drag. ...But there will come a time where I may get an entry in an inverse ETF in my speculative pie in which I will need to execute. The entry shows up for another reason though...the scan searches for performance through value, momentum and safety when compared with over 5000 instruments (only one APP can do this). I skim the effervescence with the few entries that I get and hold on until the Champagne calms down (my unique use of this one APP that I mention frequently). This is a true Stockaholic moment when this comes together. It has been under 2 weeks of trading so yes this portfolio is outperforming the S&P which I have never accomplished before. But the true test of time will reveal if I have an edge. I am celebrating while I can. I may even visit the cocktail lounge here later tonight. But first I am having Lamb for dinner before the libations begin. ES
This is a lot...but the chart is easier to read...give me some time to digest this. I may not be the sharpest nail in the shed but I will do what it takes to beat the S & P.
I only have 5 years and do not have time to ride out a bear cycle. If I were younger you would not see any bonds in this pie. It is imperative that I learn how to trade a bear cycle in a way to not only maintain a positive yield which I do not have in this portfolio now (down 0.23%) but to increase to keep a smooth upward sloping yield curve. I have learned how to lose trading Futures and Forex and maintain reasonable expectations. I think my goals are entirely reachable. I keep the vigilance and aim high to push efficiency. I am trying my hand with Equities, which suits me better than leverage. I like strategic investing over a longer term. I call the hybrid position trading that I do "TradeVesting" Human nature will draw a lot of folks to this thread. Can Electric do it? He will fail...So grab some popcorn and let the entertainment begin! You have a link to the portfolio and nothing is held back. https://m1.finance/h_ePIttQh ElectricSavant P. S. I am posting in Stockaholics because I like the demeaner of the posters here and I like the name, Stockaholics. Also it seems that there is no BS here and the contests keep it real with real traders actually trading and investing.
Hey it works! This is a spreadsheet that I made and want to share. https://docs.google.com/spreadsheets/d/1MUVz3m9HUDXKWFn8KP3kKtbJK7tCeI6WMm1QdqVNKoc/edit?usp=sharing
...I am listening to this now. I listen to it daily (sometimes late at night as I battle with time. I am so thankfull that I only need 6 hours of sleep or less). This is such an enjoyable podcast and matches my style 100% https://pwstreet.podbean.com Interest rates are really moving! Biotech is active! Real Choppy today in the market! Google is too big and Amazon will not quit growing...all they care about is market share in everything they do, not profit margin. The portfolio is selling nothing tomorrow (but there are sells, but its a secret ...not really you will see when they occur....full disclosure). But after the buys are added tomorrow morning there will be a rebalance in the Best Stocks Now slice. Look at this link for the allocations: https://m1.finance/Wq74jI5tU I feel I need those 7 Dividend Arisotcrats even though they are dragging. -1.74% Tomorrow the monthly update and rebalance will add the effervescence needed for a Stockaholics Toast. Tomorrow I will add (MTCH), and (AMT) to the Best Stocks Now Slice. There are 12 holdings in that slice...it is growing! Sometimes there is nothing in there! https://m1.finance/Wq74jI5tU Lost some ground today: (the S&P lost 0.28%, but his portfolio lost 1.18%) This portfolio is outperforming the S&P 500 by 2.50% from it's inception 13 days ago (05/22/2019). https://docs.google.com/spreadsheets/d/1MUVz3m9HUDXKWFn8KP3kKtbJK7tCeI6WMm1QdqVNKoc/edit?usp=sharing P.S. If anybody is lost and does not know what is going on with these slices in this pie... just ask. You will need a M1 finance account to fully understand completely and if you wish to trade along.
Folks I am sharing everything that I use to manage this portfolio. I advertise nothing. Just sharing what is done. I hope that the outperformance continues so this thread can continue. I am so happy that I no longer daytrade. This strategic "position trading" (TradeVesting) approach really fits me. Es
