Sunday, January 08, 2017

IBD50 Lags SP500 in Week 1

The SP500 started of 2017 with a 1.7% gain, but how did the IBD leaders do?

image The top 50 stocks collectively struggled to beat the SP500 index in the first week of 2017.

$NVDA is the top ranked stock in the IBD50 and negatively impacted the return of the more concentrated porfolios, as the stock was down -3.4% to start 2017.

The best performing stock in the IBD50 this week was $EVR, up 4.8%
All strategies exclude dividends in the calculations.
I will assume a $9.95 trading 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).

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

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.  The value for SPY is based on buying at the closing price the last trading day of the preceding year.

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.

I apologize for any spreadsheet errors!

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