How To Capture 4.6% Of Alpha Every Year Without Really Trying
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This strategy has captured 4.6% of annual Alpha on average, since 2001.
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It pairs the best value stocks with the best growth stocks.
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The Beta testing period ends on or near 12-31-19.
I’m about to release a new trading strategy. I’ve been beta testing it for 12 months, as I do with all of my published strategies. I’ve been using this strategy with clients since 2005. The table below shows the performance details going back to 2001.
All numbers prior to 2005 are the result of back testing, and after that they are the results of real client returns.
If you want to see the week-by-week performance details of this strategy from 2001 you can download the complete spreadsheet. Registration is required but it’s free.
Free membership to ZenInvestor can be found here.
Why does this strategy work?
Those who are familiar with my work know I have 11 model portfolios on my website, and the performance numbers are available on the main menu. This will be my 12th model portfolio and I have great confidence that it will continue to capture significant Alpha in the months and years ahead. Why does this strategy work?
Because it combines two powerful factors – value and growth – into one screening algorithm. I start by screening for companies with fast growth in revenue, earnings, and price. Then I add another screen on top that looks for which of these fast growers are still priced at or below their intrinsic value. The end result is a powerful combination of both factors.
Coming in early January
As soon as this strategy is out of the beta testing stage I will add it to the other factor-based strategies on the website. I expect that to happen in the early part of January 2020.