The “Model Portfolio”

What years did your investing portfolio perform it’s best? How long did it last? How did you go about finding the stocks that it consisted of? As a professional investor that is something I give thought too. For several years I ran in person once a month investing groups. Investors would get together to hear a speaker, share ideas, and compare notes. For a topic one month I taught the group how to create their own stock scans. Using criteria they wanted for their individual scans. EXP: Lets say you like stocks that are all above a certain moving average, with daily volume of your choice, and in blah blah sector that beat earnings the last X amount of quarters, it can go on and on. Again it was to teach investors with their criteria, I already have my own.

What I then did for the group was create what we called “The Model Portfolio” it worked like this::: Each month we would run the scan that I created. We would take the Top 10 Performers from those results. Those 10 then got put into a “List” out of those 10 we then took the Top 5. Those 5 then became our “Model Portfolio” We would invest ( Hypothetically) in those 5, at the end of each month we would revisit our 5. If one fell out of favor, meaning it wasn’t in the Top 5 anymore, we would then replace it with whichever one that had moved into its spot. It was kind of like Sector Rotation but it was stock rotation or a “Rebalance” you could call it.

That Model Portfolio was so successful that I then replicated it for my own investing. Of course I looked at it more than just once a month, and sometimes I did the rotation within the month if a position was taking a hit. Remember we are not fans of allowing our winners to turn into losers. And at the end of the month we would then run a fresh scan, same criteria just re-run it to see if anything popped up that was outpacing others in our Top 10 so we could adjust accordingly. Some stocks only lasted one or two months, some lasted well over a year.

Sector Rotations don’t happen overnight. But they are real, and when they hit they hit. Todays Heat Map is once a again a “Mixed Bag” Tech is still “Stuck like Chuck in a truck in the muck and the yuck and out of luck”……. Gonna be fun to see what my Model Portfolio brings with this months close. See you all Sunday night.

Invest wisely, live charitably and be well

Brother Bill