Here is the latest on the IBD 50 stocks investing strategies vs. $SPY
Since I last updated the strategy, the market has been on an amazing run and the popular, high beta stocks have been outperforming. As the portfolios reallocate each Friday night to the latest IBD updates, all of the portfolios are outperforming the SPY. For the week, there were 28 stocks up and 22 stocks down for the IBD 50.
AMBA led the IBD 50 with a return of 7.74% for the week. The biggest loser for the IBD 50 was FANG, down 8.22%.
The total return since 2/8/2014 is outperforming the SP500. As the market rallies, the portfolios concentrated in fewer high-flying positions are outperforming the portfolios that are more diversified with more positions.
The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50. Dividends are excluded from total returns.
Trading costs $567.15.
The portfolios concentrated in fewer holdings are outperforming the market as a whole. Only the IBD 50 is underperforming the SPY at this time.
For the month of August, the IBD 50 has 44 gainers and 6 losers. Each portfolio smoked the returns of the market. And the more concentrated the portfolio in fewer stocks, the better the return.
BITA was the top performer for the IBD 50, returning 61.57%. It was also in each of the portfolios, so the more concentrated holding benefitted each portfolio dramatically. For example, if you own only 5 stocks and one of them is up 61%, it’s likely you’re looking at your account statement and wearing a watermelon smile. The weakest stock in the IBD 50 for August was ARRS, losing 10.42%.
Trading costs $109.45
As I have been reading reviews of investing and rebalancing into model portfolios, the trading costs of rebalancing weekly or monthly is often discussed. Going forward, I will list the “in and out” rebalancing costs for each strategy. I will assume a $9.95 cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio. (Imagine the costs of doing this with individual stocks, compared to using Motif. Note that Motif limits the size of portfolios to 30 stocks).
The Top 25 holdings are listed at at Motif Investing. (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).
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 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. It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio. Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90. 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.