Portfolios Update: Making Money By Sitting Tight

making money

making money“It was never my thinking that made the big money for me, it always was sitting.” – Jesse Livermore

That pretty much sums up each of my four test portfolios this weekend. Once again, there wasn’t a single transaction to be made in any of them. I basically just sat around all week watching the numbers flash.

One interesting aspect of that is that the market seemed a lot tougher than it actually ended up being. With the 3D printing stocks getting smacked on Monday, and AMBA taking a beating later in the week, I expected all of the portfolios to limp into the weekend. But when I checked the overall returns on Friday evening, everything was up for the week. That’ll work.

Livermore said that it’s the sitting that makes the money, not the thinking. That is something that each of these four systems has in common. They position themselves in stocks or ETFs that are likely to move higher, and then they simply sit and wait for that to happen. If nothing happens, no big deal. If prices drop, there are safeguards in place.

These strategies all have a method to determine which markets are trending higher. Then, once they get themselves into those markets, they have methods to keep losses small and are also designed to let winners run as long as possible. This creates strategies with limited downside and unlimited upside.

Here is what the four strategies look like this weekend:

Weekend IBD 50 Trend Following Portfolio

The IBD 50 Trend Following Strategy had what I thought was going to be a really rough week. The portfolio holds two of the 3D Printing stocks that got hit on Monday. It also holds AMBA, which got slaughtered on Wednesday, and then again on Friday.

Despite those setbacks, the IBD 50 Portfolio finished the week with an overall return of 4.46%. This is a solid jump from the 3.12% it was at last weekend.

Last week, the story was that DDD and JAZZ were both up over 35%. This week, those two have come back to earth a bit, but a bunch of the stocks with smaller gains continued to inch their way higher. At this point, there are only three positions in the 20 stock portfolio that aren’t sitting on profits. That is impressive stock selection, which is mostly driven by the excellent screening of the CANSLIM approach.

Moving forward, AMBA is most likely going to trigger the 10% stop loss in the coming week. Aside from that, nothing else is very close to an exit.

Here is what the Weekend IBD 50 Trend Following Portfolio looks like this weekend:

ibd 50 portfolio


Weekend S&P / Russell Trend Following Portfolio

True to form, the S&P/Russell Portfolio was less exciting than the IBD Portfolio, but actually more productive. After ending last week down 1.28%, the portfolio broke into the positive this week finishing up 1.48%.

The S&P / Russell Portfolio also saw a lot of improvement from its less-impressive holdings this week. None of its stocks are anywhere near signalling an exit, so it looks like this portfolio will trade less frequently than the IBD Portfolio. This advantage in transaction costs could theoretically make up for the gap that the S&P/Russell Portfolio is currently trailing by.

Here is what the Weekend S&P / Russell Trend Following Portfolio looks like this weekend:

russell portfolio


Ivy Ten Portfolio

The Ivy Ten Portfolio jumped from breakeven last weekend to an overall return of 0.86% this weekend. It has been fully invested in US equities since it started at the beginning of December and will continue that way at least until the end of January.

Here is what the Ivy Ten Portfolio looks like this weekend:

ivy ten portfolio


Ivy Twenty Portfolio

The Ivy Twenty Portfolio showed up big time this week. Last weekend, it was up 0.71%, but this weekend it is up 2.28%. While all three ETFs have been strong, IWC has been incredibly impressive the past few weeks.

This shows the additional power that the Ivy Twenty Portfolio has over the Ivy Ten Portfolio be being able to focus on more detailed asset classes. Of course, there is a flip side to that coin as well, which means that the Ivy Twenty Portfolio will probably be a lot more volatile in the future.

Here is what the Ivy Twenty Portfolio looks like this weekend:

ivy twenty portfolio