2Wk
@Wealth-AcceleratorDo you then look every month to see which stocks have the best performance and then possibly switch every month or do you always compare the performance over a year?
How and where do you find out which stocks have the best momentum?
How and where do you find out which stocks have the best momentum?
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@Cyonix
Hey, that's right. At the end of each month, I update all the stocks that are currently in the MSCI World (I use the current composition of an MSCI World ETF for this).
I put them in Portfolio Performance and give them their 1M/2M/3M/4M/5M/6M/7M/8M/9M/10M/11M performance.
Then I pull the entire universe into Excel and add the market capitalization of the individual stocks and then divide them into 10 deciles.
I also create certain momentum scores. For example, I add up the 2M/4M/6M/8M performance of all stocks and sort them in descending order by this value. The top stocks end up in the portfolio.
There are still a few subtleties and details that I do, but basically that's it.
I want to act according to rules and be as little active as possible myself, because I believe that humans and emotions are more harmful than useful.
A small example:
At the March/April month change, the algorithm flushed Bloom Energy to the top and told me that Bloom Energy had to be number 5 in the portfolio. Based purely on my gut feeling when looking at the chart, I would not have taken Bloom Energy. What happened in April? Bloom Energy outperformed everything by over 100%.
This is still far from statistically relevant, but it encourages me to intervene as little as possible.
Hey, that's right. At the end of each month, I update all the stocks that are currently in the MSCI World (I use the current composition of an MSCI World ETF for this).
I put them in Portfolio Performance and give them their 1M/2M/3M/4M/5M/6M/7M/8M/9M/10M/11M performance.
Then I pull the entire universe into Excel and add the market capitalization of the individual stocks and then divide them into 10 deciles.
I also create certain momentum scores. For example, I add up the 2M/4M/6M/8M performance of all stocks and sort them in descending order by this value. The top stocks end up in the portfolio.
There are still a few subtleties and details that I do, but basically that's it.
I want to act according to rules and be as little active as possible myself, because I believe that humans and emotions are more harmful than useful.
A small example:
At the March/April month change, the algorithm flushed Bloom Energy to the top and told me that Bloom Energy had to be number 5 in the portfolio. Based purely on my gut feeling when looking at the chart, I would not have taken Bloom Energy. What happened in April? Bloom Energy outperformed everything by over 100%.
This is still far from statistically relevant, but it encourages me to intervene as little as possible.
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•2Wk
@Wealth-Accelerator Thank you for your detailed explanation. Do you now trade completely according to this scheme and do you still have savings plans on the side?
If completely new shares are suggested to you at a change of month, then you sell all your shares and reallocate, right? In what proportion do you then invest in the individual shares?
If completely new shares are suggested to you at a change of month, then you sell all your shares and reallocate, right? In what proportion do you then invest in the individual shares?
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•@Cyonix I would not recommend anyone to invest their entire assets in such a model. If it works in the medium term, the model itself will ensure that significant portions of your assets are allocated there. My wish is to achieve a sustainable 2% per month after tax.
I have most of my assets in all-world ETFs. I have brought these to a level where my retirement provision is complete.
With this satellite, I am now ready to gradually invest 30,000 euros, with the aim of being more than finished with my wealth accumulation at 45 and then being able to withdraw steadily. I have currently paused my savings plan in the All-Worlds for the short term in order to expand my satellites a little: Gold, BTC and rule-based single stock momentum.
Back to the model:
The model is designed so that I expect an average of just under 2 switches per month (switches cost money...). On average, 5 shares are held, at least 4.
But it can also happen that everything has to be changed.
And if a share has to be changed, the "outgoing" share is exchanged for the "incoming" share. So there is no monthly rebalancing (this eats up too many costs and does not have a positive effect on returns).
My model currently accounts for around 4% of my capital market allocation. In my last posts you can see what I hold in the overall portfolio.
I have most of my assets in all-world ETFs. I have brought these to a level where my retirement provision is complete.
With this satellite, I am now ready to gradually invest 30,000 euros, with the aim of being more than finished with my wealth accumulation at 45 and then being able to withdraw steadily. I have currently paused my savings plan in the All-Worlds for the short term in order to expand my satellites a little: Gold, BTC and rule-based single stock momentum.
Back to the model:
The model is designed so that I expect an average of just under 2 switches per month (switches cost money...). On average, 5 shares are held, at least 4.
But it can also happen that everything has to be changed.
And if a share has to be changed, the "outgoing" share is exchanged for the "incoming" share. So there is no monthly rebalancing (this eats up too many costs and does not have a positive effect on returns).
My model currently accounts for around 4% of my capital market allocation. In my last posts you can see what I hold in the overall portfolio.
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•2Wk
@Wealth-Accelerator or simply invest in your wikifolio, then you can save yourself the work 😜
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•2Wk
@Wealth-Accelerator So you leave the stocks that are still doing well in your portfolio, even if they no longer have the top momentum, and then add the stocks with the top momentum?
By loser do you mean that the worst stock goes out even if the return is positive and the momentum is still there?
By loser do you mean that the worst stock goes out even if the return is positive and the momentum is still there?
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@Cyonix There is no wikifolio yet. But it's definitely something to consider, especially because no capital gains tax is due on a share swap. You pay for this with a few certificate and performance costs, but it could make sense, I'll have to think about it.
To your question about what stays in:
No, I only ever hold the top shares. However, experience shows that some stocks stay in the top list for longer and therefore don't need to be swapped. As I said, on average I reckon with just under 2 switches per month.
And by losers I mean those that are no longer at the top. And in the best-case scenario, it is exactly as you say, the share may even make a good gain, as Teradyne did in April, but is overtaken "from below" by an even better score.
To your question about what stays in:
No, I only ever hold the top shares. However, experience shows that some stocks stay in the top list for longer and therefore don't need to be swapped. As I said, on average I reckon with just under 2 switches per month.
And by losers I mean those that are no longer at the top. And in the best-case scenario, it is exactly as you say, the share may even make a good gain, as Teradyne did in April, but is overtaken "from below" by an even better score.
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•2Wk
@Wealth-Accelerator Thank you very much for your detailed explanation. I'll dig into it and see if I can manage it with PP and Excel etc. If I have any questions, I would come back to you. Or present my results during the first test, so that I don't make a mistake
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•1Wk
I have now managed to add positions from the MSCI world in PP (displayed on the left in the sidebar under "All securities". I have added the columns 1M,3M,6M. However, the prices are only fetched via PP and then only 100 pieces at a time and require a login to PP. If I want to select Yahoo Finance, I have to set this for each stock individually. With 1600 positions, this is extremely time-consuming. How did you do that?
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@Cyonix I also put an incredible amount of effort into it to get the whole trunk in there.
In the end, however, I think I found a reasonably tolerable way to do it faster. But I don't know it off by heart, I'll have to have another look myself. But I probably won't be able to do that before the end of the month. Because I'm not taking the laptop with me on vacation 😅
In the end, however, I think I found a reasonably tolerable way to do it faster. But I don't know it off by heart, I'll have to have another look myself. But I probably won't be able to do that before the end of the month. Because I'm not taking the laptop with me on vacation 😅
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•1Wk
@Wealth-Accelerator then I ask you to cancel your well-deserved vacation immediately and go home 😜
Enjoy your vacation 😊
Enjoy your vacation 😊
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