A New Inclusion in My Index Portfolio

Monday, September 23, 2013

Those who have read my posts know I favor equity index investing and trading 200 day trends.

I am willing to accept what will probably be less exiting returns so that I can avoid the specific risks of individual stocks.

Example:  Year To Date

SPY   plus 19%  ( 500 stocks, dollar weighted by total value of shares outstanding )  VTI   plus 20.2% ( Entire USA Equity Market – 3, 434 holdings )  VB  plus 26.1%  ( 1700 Vanguard selected small cap equities ), RPG  plus 28.1%  ( Fastest growing third of the S&P 500 ),  QQEW  plus 28.8% ( Nasdaq 100 re-sorted from cap value to equal value invested in each of the 100 equities )

Versus:  For Example….. Equities such as  AMZN  plus 23.7%,  C  plus 28.5%, DFS  33.4%,  DIS  plus 30.6%, GE plus 15.5%,  LNKD plus 27.0%, MSFT  plus 17.9% , T plus 0.4% TWX plus 32.8%, VZ plus 9.8%.

I do not know what flavor of nasty surprise awaits me in each of the above equities, and contemplating that is what I want to avoid !

Now, I have found a new candidate to join the five Index Symbols shown above.  BFOR is an ETF basket containing the Barrons Newspaper 400 stock index.  This ETF was launched June 2013 and has accumulated $89 million in investor funds since then.  BFOR is a stock pickers index choosing what it believes is the best 400 equities from 6,000 analyzed.  It uses 24 indicators including growth, value, profitability and cash flow to make its selections.  It is more expensive to own than the passive indexes ( .o65% versus .o5%  for VTI )  so it better outperform the cost differential.

Since June 30 it has outpaced all my passive and semi passive indexes, save one,  QQEW plus 11.9% / BFOR plus 11.8%. ( SPY plus 5.7% ) ( RPG plus 9% ) (VTI plus 6.5% ) ( VB plus 8.4% )

I will invest another 25% of my investment funds after the close September 30 if VTI finishes that day above its 200 day moving average.

My planned investment selections are as follows:

VTI ( 45% ) SPY ( 0 % ) BFOR ( 20% ) QQEW ( 15% ) VB ( 10% ) RPG ( 10% )

 

Richard Maurice Gore

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