Sunday, March 02, 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 struggled against the $SPY. This time, “specific stock risk” raised its ugly head as $JAZZ Pharmaceuticals had disappointing earnings and news.  JAZZ does remain above the 50dma, so it will be interesting to see if that provides support.

For the week, there were 29 stocks up and 21 stocks down for the IBD 50.

The total return since 2/8/2014 remains impressive against the SP500.  What will be interesting to see is how the higher concentration in the high flying stocks performs versus SPY in corrections and sideways moving markets.  Although the make up of the IBD 50 changes, and the top stocks should always be the outperformers. 

Of course, “always” and “never” are words that should be used with caution!

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

imageFor the IBD monthly strategy, the monthly return is equaling the total return, but that is now rebalanced for March.   I expect the differences to show up as the weeks pile up.

Of the top IBD 50 stocks, there were 41 up for the month and only 9 with negative returns.  (Since the 2/8/2014 inception date).

The make-up of the monthly strategy has been updated as of the Friday close, with the latest list of the IBD 50 stocks.

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 or other market timing strategies 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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