The TurnerTrends Managed Portfolio
I manage a total portfolio of stocks. I invest in these stocks with my personal funds. Each week, as I plan to make changes to the portfolio, I notify my subscribers, in advance, with a list of the trades I plan to make. The name of the portfolio is the TurnerTrends portfolio. This is not a theoretical exercise. I make real trades with real money in my management of this portfolio.
Why is this important to you? If you are looking for an actively managed, well diversified portfolio of stocks that consistently outperforms the market, and one that you can emulate with your own funds, then learning how I manage the TurnerTrends portfolio might be very important information for you. If you want to match my performance with this portfolio, then you should consider matching my trades, trade-for-trade.
Many financial websites offer a list of stocks that might make up a great (in their estimation) portfolio of stocks. But, most of those sites are not actively managing a portfolio of those stocks with actual pre-trade information, along with asset allocation and industry diversification decisions (more on this, below). Also, the list gets even smaller when you add in the fact that I have both long and short positions in the portfolio.
And, it doesn’t matter how little or how much money you want to have in your own, TurnerTrends portfolio. You can match my performance if your portfolio is $20,000, $40,000, $100,000, $250,000 or more. And, it is easy to do. I even give you a weekly updated worksheet (the Portfolio Tool) that lets you put in any dollar amount that you want to manage in your own portfolio, and calculates exactly how many shares of each stock you should own, if your goal is to match me trade-for-trade. Keep in mind that the cost of your trades may vary from mine depending on the broker you use. Also, the smaller your trades, the larger the relative cost of your transaction fee. But, other than that, you will be able to match my performance week-in and week-out.
Here is a list of what I do in my management of the TurnerTrends portfolio:
- The goal of the portfolio is total return. There is quite a bit of trading that goes on in this portfolio, but as you can see from my performance charts, I am still able to generate very healthy returns. And, yes, I include both the cost of trades in my performance numbers AND I reinvest all dividend income.
- I like to be in stocks that are relatively low risk. As such, my stocks tend to be in the lowest 5% of stocks in the S&P-500, according to the website, RiskGrades.com.
- I believe in broad diversification. I do not let any one industry occupy more than 20% of the portfolio at any one time. The TurnerTrends portfolio is very broadly diversified.
- I don't focus on small-cap, mid-cap, large-cap... I focus on finding the best stock at the right price at the right time. So, in that regard, I am what is known as a "bottom-up" type of investor, as opposed to, a "top-down" type of investor. I do not take a position in a stock because of its industry or sector. Although, I will limit my positions in some stocks because of my diversification rules, noted above.
- I believe in equal weight distribution of investments across all stocks, as another goal of the portfolio. But, I limit the amount of funds I will invest in a single stock in the portfolio to no more than 4%. So, with a portfolio of approximately 25 stocks, if I was fully invested (meaning no cash), I'd have about 4% tied up in each position, as the ultimate goal. But, I may have much less than 4% in some stocks. If I feel a stock is riskier than I am comfortable with, I may dollar-cost-average my way into that stock. I believe short positions are more susceptible to risk than long positions, so I often invest less in short positions than in long positions.
- I maintain an exit strategy for every stock in the portfolio. I have a formula for StopLoss settings that is based on:
- Past 12 months of pricing volatility
- Statistically accurate forecast of a stock's pricing movement on a week-to-week basis
- Market Timing as measured by my analysis of the bullishness or bearishness of investors in the market
- Percent of profit gained to date
- Before I pick a stock to add to my portfolio, I utilize both Technical Analysis and Fundamental Analysis. There are specific hurdles each stock must reach before I select it for the portfolio. Please read my approach to Fundamental Analysis and Technical Analysis to get a good understanding of how I apply these activities to picking the right stock at the right time.
- And finally, I firmly believe in following a disciplined approach to buying and selling stocks, which includes:
- Elimination of emotion. I never 'marry' a stock, and I don't pay a lot of attention to analyst's opinions on companies unless they are reporting facts.
- I stick to my trading strategy. I've got an investment philosophy and methodology for stock trading. I use this approach in good markets and bad markets. I am consistent and steady. I may move the portfolio more into cash at some times than others, but I do not change my investment strategy on a week-to-week basis. Do I ever make changes to my methodology? Of course, but these changes are an exception, not the rule.
So, to summarize: My "Managed Portfolio" is a chronology of exactly how and what I am doing to manage the TurnerTrends portfolio, following all of the above processes. As a subscriber, you get the full benefit of this managed portfolio, such that you can actually mimic exactly what I am doing with your own funds in your own personal portfolio. So, if you want a well-diversified portfolio of low-risk stocks, that consistently outperforms the market and most mutual funds, then a subscription to the TurnerTrends Report will provide you with your own "Managed Portfolio." |
