Understanding our Weekend Updates and Periodic emails
As a subscriber to TurnerTrends, each week you will be emailed our Weekend Update about our management of the TurnerTrends Stock Portfolios and updates on our Tools. This update is also your notification that the stock database and portfolio database have been updated for the coming week.
There are two ways to use TurnerTrends stock and portfolio information:
- Use the information as an investment resource, where you look at what and how we are trading to provide you insight on your own trading activities, or
- Set your trading activity to mirror our trading activity. Only do this if you want to make the same rate of return that we are making. Most of our subscribers, match us, trade-for-trade. Keep in mind that you will need to have at least the same amount of money in your 'mirrored' portfolio as we have in ours to at least match our net returns. If you follow our portfolios with substantially less dollars, your return will be less due to the relative cost of trading fees in relation to your net total return.
The following Guide is important to follow if you plan to match us, trade-for-trade:
Rule 1. |
Asset balancing
It is important to maintain a balanced and diversified portfolio. We have a goal of not investing more in any one stock than in another, within the same portfolio.
There are times however, when a stock's value becomes dis-proportionately weighted in a portfolio. This will occur when a stock moves up significantly in share price. The goal is to keep the investment in each stock reasonably equal, not necessarily the value. So, we may let a stock’s value become dis-proportionately large and not be out of sync with Rule 1. However, when our profit in a stock is 25% or more, we institute a much more aggressive StopLoss action (see more of this in Rule 5, below).
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Rule 2. |
If mirroring our trades, be sure to only buy when we buy and only own what we own
Rule number two is to trade when we trade, and keep your portfolio proportionately in line with the TurnerTrends portfolio(s) that you are mirroring. If you are a new subscriber, DON’T rush out and take positions in every stock we have in the portfolio. It is more important that you wait until we open a new position in the portfolio.
Each TurnerTrends portfolio detail page on the TurnerTrends website contains a list of all the planned trades for each week. This makes it easy to know what stocks to add to your portfolio, if your goal is to match us trade-for-trade.
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Rule 3. |
Size of investment
You do not have to have the exact amount invested in your portfolio as we have in the TurnerTrends portfolios. The total amount you invest is entirely up to you. However, keep this in mind... If you have significantly less invested in your portfolio than we have in ours, your net cost of trades (broker fees) will be dis-proportionately larger than ours and will cause you to have a lower net return than we report. Also, if you mirror our Stock and Option portfolio, you will need to have exactly the same investment basis as we have in the portfolio; or, you can mirror our trades by having incrementally larger amounts. For example: If we were trading our of a $50,000 portfolio, you would need $50,000 or $100,000 or $150,000 (etc) to be able to match our trades contract for contract or multiples of our contracts.
On each portfolio page of the website, you can download our Portfolio Calculation Tool. This is an excel spreadsheet that simplifies the process of staying in sync with the TurnerTrends portfolio, regardless of your total investment.
Simply put, this worksheet lists all the stocks in the TurnerTrends portfolio and provides a place for you to enter the total amount of your desired investment. It then calculates the total number of shares to own if mirroring the portfolio, based on the current distribution of stock in the TurnerTrends portfolio.
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Rule 4. |
Trade when we trade
With the exception of the Stock and Option portfolio, we place all our opening trades over the weekend with limit orders, which generally are filled some time in the following week. We tell you what we plan to buy, the limit order price, the percent of the portfolio and the stop loss... before we make those trades.
Stock and Option trades are made, typically, during market hours. If we find a great covered call trade, we will send you an email with our net debit opening trade, the stop loss and the net credit closing trade, prior to us actually making the trade.
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Rule 5. |
Always place your orders as LIMIT orders
For all but covered call trades, we place our trades over the weekend using limit orders. We like to trade for free if possible. To do this, we often place our limit orders below the Friday closing price. The actual limit order is predicated on each stock's Expected Move for the upcoming week and our assessment of how weak or strong the market will be. Placing limit orders means we do not want to pay more than a specific amount for a stock. If a trade does not fill by Thursday, we will reevaluate the order and either raise our limit order or just let the stock go. We prefer to not chase stocks.
Our 'rule-of-thumb' on setting a price on Limit Orders is to set the Limit Order for long positions about 2%-3% higher than the Friday closing price. For shorts, the Limit Order would be about 2%-3% below the Friday closing price.
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Rule 6. |
Set your stop losses
Each week, we update the website with any new stop loss settings for each stock in each portfolio. These stop loss settings are used for three very important reasons:
- To limit our downside risk when a stock’s price suddenly and unexpectedly moves against us, and
- To get us out of a stock when its pricing trend has reversed. Stop losses are a key part of the TurnerTrends methodology and how we typically exit a particular stock with maximized profits.
- To maximize profit. Our stop loss settings are calculated to stay outside a stock's normal weekly pricing swings, without stopping out. This lets us stay in a stock while it is moving up in price, but gives the stock price some room to fluctuate. However, when our profit in a stock becomes significantly high ( > 10%), we institute a much more aggressive (tighter) stop loss. This means the likelihood of us stopping out of a stock with the more aggressive stop loss is much higher. It is possible that our stop loss could be triggered and the stock continue to appreciate in price. But, we would rather lock in our 25% gains than risk losing much of that gain should the stock suddenly reverse course.
So, we strongly urge you to set your stop losses for each stock in your portfolio and update them when we make changes.
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