Short-Term Stock Portfolio
Performance
We've found that by slightly
adjusting the stock-picking methodology of the Short-Term
Portfolio and by shortening the holding period, we can substantially
increase the performance. Here are the performance numbers
for the portfolio back-tested from July 2001 to now:
Short-Term
Portfolio Performance |
|
| Minimum Holding Period* |
Avg. Annual
Return |
| 1 Week |
54.7% |
| 1 Month |
52.0% |
| 3 Months |
43.1% |
| 6 Months |
41.6% |
Because shorter holding periods
have been correlated with higher returns, starting September
7, 2004, we will be using the revised stock-picking
methodology and updating the Short-Term Portfolio much more
frequently. Changes to the portfolio will be updated
a few minutes before or after each day's opening bell. Because
of the frequent and regular updates of this portfolio, we
will not email subscribers each time this portfolio changes.
Of course, we will continue to email subscribers whenever
our other portfolios have a buy or sell signal.
If we did send out an email
each time the Short-term Portfolio changes, then subscribers
could, at times, be inundated with email since the portfolio's
holdings may change five times during a given week. This
is not to say that followers of this portfolio need to buy
and sell every time there is a change in the portfolio's holdings.
Keep in mind that the returns listed above assumes each stock
is held a minimum of one week and that longer
holding periods still resulted in extremely high returns.
So what kind of results can
be expected for investors who hold the stock only as long
as it's recommended and not any longer? In other words, if
a stock is recommended on a Monday and is no longer recommended
on Thursday, would an investor's returns be substantially
different from an investor who held it for at least a week?
Well, unfortunately, back-testing for holding periods of less
than one week isn't possible, but we will test this going
forward. We started tracking the results assuming an investor
bought and sold every time a stock appears or disappears from
this portfolio's recommendation list. So far, buying/selling
on each and every portfolio change has resulted in the portfolio
producing a gain of 154.4%
(equivalent to 36.6%
per year) since 9/14/2004 when investing in our highest-ranked
stocks in the portfolio (designated as "Double Allocation"
stocks). Over the same time period, the S&P 500's return was 28.8%.The
returns assume a commission of $5 per trade which is the fee
that investors pay if they use www.AmeritradeIZone.com or
www.Brownco.com.
It's probably unrealistic
to expect the portfolio to continue to provide an annual return
of 54.7%,
but stranger things have happened. Stay tuned.
More importantly, to see if
this portfolio is right for you, be sure to read our Short-Term
Stock Overview page.
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