Year to date, the stock market has produced flat returns on the S&P500, and a -9% return on the TSX300. This is demonstrated in the charts of the S&P500 and TSX300 below. Investment Pro’s, who by and far believe in a lower turnover approach (i.e. less trading, more buy & hold) to managing their clients’ money typically follow the returns of the index’s. Thus, many clients of such managers haven’t made much money this year.
At ValueTrend, we’re happy to report that our highly active/high turnover approach has produced significantly better returns than the indices. In fact, independent Portfolio Manager Analysis done by Patterson & Associates has ranked us as the 3rd lowest volatility and 8th best risk/return compared to Canadian Portfolio Managers in our space (Canadian Focused) to the end of October. This is great news – But it appears that ValueTrend is not the only ones who can outperform the markets with less risk.
TradingMarkets – a Web site that provides its subscribers with stock analysis – invited 10 Playboy models to participate in an investing contest.
When results were tallied toward the end of the year after their last contest (2006), 40 percent of the bunnies delivered better returns than the S&P 500, compared with just 29 percent of actively managed mutual funds.
So, if you want better returns than the markets, you might want to consider the services of ValueTrend, or ask the Playboy Bunny crew for some stock tips.
On the subject of transparency
I try to be open about my trading philosophies and thought processes that go into the ValueTrend equity platforms. This transparency is evident in my bi-weekly blogs, along with the media writings and BNN appearances. I am also proud of the fact that performance numbers are available for all who wish to view them–right here on this website. This is something less common in the investment industry. Many Investment Advisors have mentioned to me that they don’t like the public to see their performance numbers, and they don’t spend time talking to their clients about their relative performance numbers. They’d prefer to concentrate on the client/ Advisor relationship rather than performance. They claim their clients don’t know and don’t care how markets have done, or how they’ve performed relative to them. Their clients top criteria is how much the Advisor “cares” for them. Strange, as I’ve always felt that the best way to show a client you care is to offer good performance and be fully transparent about everything involved in the process.
Each to their own, I guess.
10 Comments
Perhaps they don’t show their performance because they cannot achieve the index returns. Comparing their results to the index may have their clients second guessing the reason they need a money manager in this scenario.
At the very least, we can see the returns of mutual funds versus the index.
Keith, I know you are able to achieve above average returns because the system you use combines many different investment disciplines, which work well together.
I think at times the investment industry can use convoluted approaches when attracting clients. The last thing they would want to show is results below the index returns.
Couldn’t have said it better myself, Eric.
Hello Keith, I was looking into the housing/reit market today, specifically Canada and I was wondering if you had a post in mind. I feel like your followers would really enjoy your perspective and Valuetrend’s approach to the matter.
Moreover in my own opinion, but if you did do a future post on this, if you could address possible alternatives to potential 15% growth on an asset over 3 years (A home), if there is a better place to put your money given the current situation eg. corporate bonds.
Great job on the blog and congratulations on Valuetrend being ranked 8th best risk/return, huge accomplishment.
Thanks Cody
I’ll post on the REIT’s today–hopefully will have a blog by the end of the day for all to read
I wont cover housing markets–that is out of my securities – trading radar and scope. I’ll stick with marketable listed securities like REIT’s.
Excellent post Keith. This really puts things in perspective. I’m an active retail trader, (a student of the markets and technical analysis). Thanks for putting out great material here and on BNN.
Much thanks Dale. Keep learning!
Hello Keith,
Would you please comment on your hold strategy once a stock has broken a bullish uptrend. I believe you have mentioned that you wait 3 weeks before selling a longer term stock, hoping for a rebound up to the previous resistance level. Is that a hard and fast rule, or just a guideline?
Thank you,
Chris
Excellent question Chris–its a hard rule EXCEPT when markets are correcting on an overall basis. In such a case, you have to “excuse” the pullback on the trending stock–case in point, we held DIS through the summer despite its fall from $119 to $100 in August. We “excused” it, given the circumstances–and no, we could not have predicted that much pullback, hence why we didn’t sell then buy back. Good call to hold it, seeing that the stock is back to $115 now.
So–rule is, break of a low, and a break in the 200 day MA you sell EXCEPT if the entire market is having a strong negative move that you deem to be a correction (not a crash).
Keith: The reason you have the following you do is because of your transparency. I will reiterate that I very much appreciate this approach of yours and will continue to make reading your blog and following your successes a part of my work week. Merry Christmas.
Thanks very much Terry–Merry Christmas too!