Saturday, February 22, 2014

Update - The IBD Top 50 Stocks Strategy

Here’s an update on the IBD Top 50 stocks investing strategies vs. $SPY

image For the week, the IBD weekly strategy had another great return. Once again, the concentration in a fewer names at the top of the IBD 50 list outperformed a larger set of names.  The top 5 IBD stocks led the top 10, which led the top 25, which led the top 50.  The SP500 didn’t stand a chance this week.   In a market that is going up everyday, I would expect growth stocks to outperform the SP500 (SPY).

So far, so good.  Is the air getting thin up at the top of the list?

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.

image For the IBD monthly strategy, the monthly return is equaling the total return, as the portfolio will not rebalance until next Friday at the close.  Just two weeks in, there isn’t much difference between the monthly and weekly strategies.  I expect the differences to show up as the weeks pile up.

The make-up of the monthly strategy will remain the same until the last trading day of the month, February 28th.

You can view the Top 25 holdings at Motif Investing.

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance for the week and since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders are not considered. 

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.

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