Here is the latest on the IBD 50 stocks investing strategies vs. $SPY (only monthly model today).
The IBD monthly strategy continues to lag the SP500 as July comes to a close.
The total returns for all monthly models continue to trail the SP500. It probably isn’t a shocker that trying to pick just the winning stocks lags a more diversified index. Especially since the winning stocks are often added to the IBD 50 list after a huge move is already in a stock. The idea is that stocks that have gone up will continue to go up. Hmm.
BITA led the monthly IBD 50 models with an 11.6% return. On the downside, AFOP fell 26.1%.
For the month of July, the IBD 50 had 17 gainers and 33 losers.
Trading costs $89.65.
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.