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Beating the S & P 500

Discussion in 'Investing' started by ElectricSavant, May 25, 2019.

  1. ElectricSavant

    ElectricSavant Active Member

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    Face it...Why spend the time if you cannot beat the S & P 500? You could just play the index and let it ride if you have the correct time horizon.

    I have a 5 year time horizon with my position trades in this active portfolio. You need at least a 10-year time horizon for dollar cost averaging into a Buy & Hold strategy. So this thread is not the standard thread for most of the investors using M1 Finance folio-type, robo-investing.

    I want to share this ROTH IRA portfolio that I am managing using M1 Finance as the broker and report here in this public journal. I am prepared to take an inverse position in the event of a bear market. I am unable to trade short with M1 Finance however I can use longs with inverse ETF's.

    Please post and follow along... and be respectful of one another is all that I ask.

    MB
     
    #1 ElectricSavant, May 25, 2019
    Last edited: May 27, 2019
    OldFart likes this.
  2. ElectricSavant

    ElectricSavant Active Member

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    I have 40% of the portfolios money in Bonds. I take a 4 segment approach to bond holding as they are used as an alternative to a money market account to park cash in. I learned of this 4 segment approach at the ishares website.

    ...so here are 40% of the holdings

    10% Bonds < 3 months (SHV)
    10% Bonds 3-6 Months (FLOT, ICSH)
    10% Bonds 6-18 Months (NEAR, MINT) I added MINT for diversification
    10% Bonds >18 months (IGSB, SHY)
     
    #2 ElectricSavant, May 25, 2019
    Last edited: May 25, 2019
  3. ElectricSavant

    ElectricSavant Active Member

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    The other 60% of the holdings are split between two slices in the remaining pie:

    I use two subscription services to help select the holdings in this part of the portolio, but I have unique uses that the author has not backtested. This part of the portfolio (Pie) is more active and holdings can be removed and added as the momentum changes.

    30%- 7 Dividend Aristocrat holdings in one slice chosen from the Aristocrats list of around 50 stocks that is updated annually. (ABT, APD, XOM, ADP, SPGI, CTAS, ABBV) These 7 choices that bubble to the top are updated monthly.

    30%- 2 speculative holdings in the "Best Stocks Now" slice. (EVBG, ROKU) This is updated daily after each close and the time in the trade can be from 2 days to a month or more. There can be zero holdings to several at one time. This is the most active and speculative part of the portfolio (Pie).

    This portfolio is outperforming the S & P 500 by 2% thus far. This portfolio (Pie) started 05/22/2019 and is up 0.94% (nearly 1%) in 3 days.
     
    #3 ElectricSavant, May 25, 2019
    Last edited: May 27, 2019
  4. ElectricSavant

    ElectricSavant Active Member

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    So now you have it...this represents all that I hold...there is nothing else. I will update here in Stockaholics upon any changes. I make the evaluations on the positions each day after market close. The Bond side of the portfolio does not change....but the 60% side does.

    Please feel free to contribute and have fun!

    Happy Memorial Day.

    MB
     
    #4 ElectricSavant, May 25, 2019
    Last edited: May 25, 2019
    rg7803 likes this.
  5. Three Eyes

    Three Eyes 2018 Stockaholics Contest Winner

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    Thanks for sharing. Will be interesting to follow along. Good luck!
     
    ElectricSavant likes this.
  6. ElectricSavant

    ElectricSavant Active Member

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    TY

     
  7. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    40% in bonds is bigger than I've ever heard of for someone benchmarked against the S&P.
     
  8. ElectricSavant

    ElectricSavant Active Member

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    Yes, I know I am 60 years old with a 5 year time horizon. I am goin' to try and do this thing in this ROTH IRA. This should be an interesting thread. I am hoping to learn something. Thank gawd I have a reverse mortgage...

    MB

     
  9. TomB16

    TomB16 Active Member

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    So many people try to beat the S&P 500, long term. I hope you're one of the extreme few who figure it out.

    Best wishes and good luck. :)
     
    ElectricSavant likes this.
  10. ElectricSavant

    ElectricSavant Active Member

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    Thanks TomB16.

     
  11. ElectricSavant

    ElectricSavant Active Member

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    One of the two stocks in the Best Stocks Now slice (ROKU) really paid well. It has made 6.85% from its entry on 05/23/19.

    Overall, the seven Aristocrats are down 0.14% with (ABBV) losing 1.56% and (ABT) showing a gain of 1.78%

    The Bonds are up 0.28% (segment >18 mo doing the best).

    The S & P closed at 2856.27 on on 05/22/19 when this portfolio was formed. On Friday 05/24/19 the S & P closed at 2826.06 -1.06%.

    MB
     
    #11 ElectricSavant, May 27, 2019
    Last edited: May 27, 2019
  12. ElectricSavant

    ElectricSavant Active Member

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    I am all over the place in this post....but these things are on my mind to drive my sentiment.

    Could you folks imagine how well the market would be doing if the tariff thingy would have been resolved and if the Fed didn't put a damper on the Trump effect by raising interest rates when they did?

    It seems like we have been at 25-26k for a while in the DOW. Does that mean that we are topping? Where do you stand? Are you bullish?

    Numbers don't lie...Earnings drive the market.

    MB

    P.S. Here are some interesting facts about unemployment data verses Stock Market Performance.
    https://awealthofcommonsense.com/2014/06/unemployment-rate-stock-performance/
     
    #12 ElectricSavant, May 27, 2019
    Last edited: May 27, 2019
  13. ElectricSavant

    ElectricSavant Active Member

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    The Tariffs for sure is a game changer. This China Tariff showdown is a Macro change and a game changer in the world global markets.

    What do you folks think?

    MB
     
  14. ElectricSavant

    ElectricSavant Active Member

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    Last Week was a dismal week for the market....with the Trade Tariff news. The 10 year bond market prints at 2.29%.

    High on the list of retailers affected by the China Tariffs: Best Buy, Dick's Sporting Goods, Bed Bath & Beyond and Autozone. This portfolio owns none of these.

    Trump is in Japan. Trade deal with Japan coming in August.

    This current earnings season is coming to an end (97% of the S & P 500 have reported and 76% of them have beaten their estimated earnings ). All indications point to this current bull market continuing. The 2020 consensus for the S & P 500 if earnings continue to grow is 3,200 (currently at 2802.39).

    The PE ratio of the S & P 500 is 17.5%. The forward PE Ratio of the S & P 500 is 16.1%

    Today the S & P lost 0.84%. The portfolio lost 1.07%. No buys or sells.


    MB

    This portfolio is down 0.13% but is outperforming the S & P 500 by 1.75% from it's inception (05/22/2019).
     
    #14 ElectricSavant, May 28, 2019
    Last edited: May 30, 2019
  15. Mark42

    Mark42 New Member

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    I’m looking forward to watching this thread. Thanks for sharing and good luck!!
     
    ElectricSavant likes this.
  16. ElectricSavant

    ElectricSavant Active Member

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    Great Welcome Aboard!

     
  17. ElectricSavant

    ElectricSavant Active Member

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    The inverted spread between 3-mo treasury bills (2.36%) and the 10-year bond 2.22% (lowest in 18 months) is a 7 year record.

    After an inversion the market can still go up....18 months

    Today the portfolio did well compared to the S & P.
    Tomorrow (Thursday) will be a busy day for this portfolio. We have 8 new holdings ALGN, AMZN, GBT, GPN, IDXX, NOW, PCTY, SERV to be added tomorrow at 10:00AM (est) to the 2 holdings EVBG, ROKU (rebalance the 30% with 10*10%) in the Best Stocks Now Slice.

    Next week comes the time that the Seven Aristocrats will be updated (once monthly). down 1.25% from inception.

    The breakdown in the portfolio remains the same:

    Bonds
    40%
    Seven Aristocrats: 30%
    Best Stocks Now (Speculative)
    30%

    This portfolio is outperforming the S&P 500 by 2.57% from it's inception 7 days ago (05/22/2019).
     
    #17 ElectricSavant, May 30, 2019
    Last edited: May 31, 2019
  18. ElectricSavant

    ElectricSavant Active Member

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    The S&P from 2017 through 2018 sure was a nice looking price chart. Look at how it contrasts to "2018 to now". It's tough at the top. I expect overall volatility to continue. We are expecting historical reactions to first time events without precedent.

    Be ready for the continuing ride and have fun...post often.

    MB
     
  19. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Feel the same way about volatility right now. Here's a chart of SPX (in orange, you can see the double top) with VIX and its 50 ma.
    [​IMG]
    The biggest pullbacks in SPX happen when the VIX 50 ma is moving up. You just get minor pullbacks when the VIX 50 ma is trending down.
     
    Onepoint272 and ElectricSavant like this.
  20. ElectricSavant

    ElectricSavant Active Member

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    For the last 10 years earnings have driven this market.

    10%
    Bonds < 3 Mo's +0.04%
    10% Bonds 3-6 Mo's +0.05%
    10% Bonds 6-18 Mo's +0.06%
    10%
    Bonds > 18 Mo's +0.29%

    30% 7 Aristocrats -0.87%

    30% Best Stocks Now +2.20%

    This portfolio is outperforming the S&P 500 by 2.79% from it's inception 8 days ago (05/22/2019).
     
    #20 ElectricSavant, May 31, 2019
    Last edited: May 31, 2019

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