Stock Portfolio Update – A 33.5% return in the past 12 months

The TopDogTrader Portfolio is pleased to report a 33.5% return on its stock portfolio for stocks bought within the past 12months. We have a higher return when including stocks bought prior to 12months ago, but we wanted to show what we have achieved in just the past 12months using predominantly one specific strategy. We have predominantly used a GARP with Momentum strategy over the past 12months. So, Growth at a Reasonable Price, but only where there is stock momentum. Our filters and specifications narrowed down the thousands-strong universe of stocks down to a more manageable number to research further. We call this the Trade Select List. This strategy has been used strictly so that if a stock hasn’t made it to this Trade Select List, it isn’t selected as a portfolio entry.

Currently, as of 20th July 2017, at the time of writing we have 17 stock holdings that were all bought within the past 12months. Currently, they are averaging a return of 33.5%. In comparison, the FTSE100 has gained 11.3% and the S&P500 has returned 13.7% during the same 12month period.

Now, bear in mind, one specific strategy will not always work forever. Currently we are in a bull market where growth strategies are working particularly well. This hasn’t always been the case and won’t always be the case in the future. However, currently we are pretty happy to continue using this strategy for this particular portfolio.

Remember that past performance is no guide to future performance. Stocks can go down as well as up. Capital is at risk.

Our overall investment portfolio is more balanced than one that uses just one specific strategy. We hold a variety of asset classes including gold and reits. We also hold a variety of managed funds and ETFs. We like to be more diversified to spread risk in the event the market suddenly changes and one strategy that has worked well no longer works so well.

Currently, the Trade Select List shows 25 UK and US stocks. Now, you could just buy all of the stocks on this list. Although, that’s not what we do. We use this list to look at the stocks in more detail, analysing further to determine whether the stock would 1) make a good fit within our portfolio, 2) our thoughts on the companies prospects, and 3) whether the shares are liquid enough for us (we don’t like to include stocks that are illiquid or could potentially move too fast in either direction.)

GARP with momentum isn’t the only strategy that we look at. We look at several other strategies like Value Momentum, Stable Income, and SharpFallers Short Strategy. We are just of the view that we should currently focus on the GARP with momentum.

GARP stands for Growth at a reasonable price. We look at several quality metrics to determine that the company is a good, solid candidate that is most likely to well run and stable. We then look at some growth and quality metrics, in particular an ROE of over 14%, EPS Growth (Quarter on Previous Year Quarter) that is greater 15%, EPS growth greater than 10%, plus many other quality and momentum metrics that we go through in more detail in our comprehensive trading courses.

So, how can you screen for GARP with Momentum stocks to find the most optimum shortlist? Well, you can try to apply the filters yourself, but 1) you would need to know exactly which metrics we are screening for (there are lots), and 2) you would need some software to screen the thousands of stocks in the investable universe.

Alternatively we can send you our bespoke Trade Select List that we create for our own portfolios. If this is something that you would find useful, we are currently offering a 1 month free trial (usually £39.99 per month) with no obligation and no credit card required.

If you would like to use these tools to aid your investing/trading, sign up to our free trial today!

No credit card details required. Worth £39.99/month.

Leave a Comment