Monday, March 31, 2014

Update – The IBD Top 50 Stocks Strategy

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

imageThe IBD weekly strategy ending 3/28/2014 had a bad week.  The poor performance was exacerbated by having less diversification this week.  The IBD 50 stocks fell over 5%, and it was worse for the top 25, top 10 and top 5 concentrations.

The market has been seeing rotation out of the high beta and volatile names into the big cap value names.  Many large institutional investors have to be invested 100% of the time, and when the high beta names stop working, money flows into the names that are more highly liquid and that pay dividends.  These big cap stocks are often seen as “safe,” although they eventually get sold off should the market go into a bigger correction. 

For the week, there was 1 stock up and 49 stocks down for the IBD 50.

The total return since 2/8/2014 is now underperforming the SP500.  The IBD 10 is the only model that has a positive return since 2/8/2014.

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

The monthly strategy will be updated tonight!

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.  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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