Portfolio Is Up
The Stay Invested portfolio was UP today: $409.20 (+0.39%)
Overall GAIN/LOSS YTD: +$2,582.82 (+2.51%)
Our benchmark index, the S&P 500 is UP Year-To-Date +4.36%
"It's not whether you're right or wrong that's important,
but how much money you make when you're right
and how much you lose when you're wrong." ― George Soros
Nothing to Buy
With the rally in the market nothing in the bull pen has pulled back to a price where I'd be a buyer. We'll just sit tight and keep looking.
The portfolio was up today and as usual it melted up a little less robustly than the overall market. Let's take a look at why that is, there's no accident here. When a portfolio goes up or down with great speed it's said to be volatile. In my personal view volatility makes people want to take their money out of the market because it seems too risky and looks out of control. It's my view that a less volatile portfolio is not only possible, but preferable because it will keep you in the market longer, with lower risk. To a professional trader, volatility looks like profits, because a trader makes money on those swings in the price. To better understand the risk profile and expected volatility of the Stay Invested Portfolio lets look at a couple of metrics, Price/Earnings ratio compared to other portfolios, and the Beta compared to other portfolios.
Using a service I can compare the P/E ratio of our portfolio to those of professional portfolio managers tracked by the service. The Stay Invested portfolio has a P/E of just 25.44 while the average for fund managers is 44.86. This is an indication that the stocks in the Stay Invested portfolio are deeper value stocks and have a very low P/E; we paid less for every dollar of earnings. It's also the result of being really cheap. Remember we haven't been taking full positions, we're trying to buy only when our stocks are really cheap.
Looking at the Beta, a measure of risk and volatility we can see that Stay Invested is significantly lower on the Beta scale than the average fund manager. In fact this looks too conservative to me, but we haven't invested all our cash yet, so our Beta factor is a bit skewed.
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Keep Me Honest
S&P 500 declines to 2,350 or more (1-3-2019)
Healthcare and Biotech sectors outperform (1-3-2019)
S&P reaches 3,000 by year end (1-11-2019)
Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:
STZ, AMZN, NVDA, BCRX, GS, BDSI, VEEV, VTI, GLD.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.