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The HERCULES portfolio The HERCULES portfolio is introduced. The stocks that make up the portfolio were selected according to the following criteria: 1) belong to different business sectors 2) the sectors have great future growth prospects 3) their medium to long-term trend is upward 4) be growth shares 5) be financially healthy 6) either be profitable or have the prospect of becoming 7) their technical picture reveals that they will likely over perform the market. Below are presented the mid-term trend charts of the stocks that make up the portfolio. The HERCULES portfolio is designed so as to, although it is aggressive, let the investor to sleep calm at night. In case of general market sharp correction the stocks of HERCULES portfolio have the potential to come back into their upward trend. New stocks may be added to the portfolio in the coming period and some removed from it depending on their course. Next follows the mid-term performance chart of HERCULES portfolio without the CRSR. Prompt: New traders should take some time and carefully read the post entitled 'You can't beat the market' that is located in my profile. Disclaimer The author of this text is not an investment advisor. The preceding content is intended to be used for informational and educational purposes only. It is not an advice or inducement for the purchase or sale of the products mentioned. Before making any investment based on your own personal circumstances, it is very important to do your own research and analysis and also take independent financial advice from a professional to verify any information provided here.
NASDAQ:MRNALong
by Gnothisafton
2
Log Scale/Bullish PortfolioGot tired and kept forgetting to manage my IRA so I'm going to buy these and forget about it for awhile. I'm not trying to get a perfect buy on these but waiting on some of them and I probably will change out a few. I was going to do a penny portfolio but didn't have enough I was bullish on to get 30. ABNB, ADAP, ADMP, APHA, AQB, BLNK, CCJ, CHEK, CIDM, CODX, CRDF, DRNA, EMAN, FRSX, FSLY, FTCH, GBTC, GHSI, GOGO, IBIO, INUV, IZEA, LPTX, NETE, NXE, PLTR, PLUG, PROG, QRTEA, RIOT, RUN, TCON, TELL, VALE, VUZI Not financial advice
ELong
by cryptowaveman
Beating SPY with a lazy 40/60 stocks/fixed income portfolioAs a demonstration for how to use the multi-asset portfolio indicator, I decided to use this particular weighting scheme as it is a great, simple mid-risk allocation scheme for now. Subjected to minimal variance due to a low beta, exposure to volatility purely through the market is mostly done through a singular asset (VTI), whereas the other non-fixed ticker (PFF) exposes the user to, in my opinion, commonly neglected Preferred Stock! The remainder is distributed among fixed income, resulting in this sturdy guy.
AMEX:SPY
by STOCHASTICU
IXIC: What Beta Means When Considering a Stock's Risk If you like this analysis, please make sure to like the post, and follow for more quality content! I would also appreciate it if you could leave a comment below with some original insight. In this post, I will be providing a thorough explanation on the concept of Beta, and why it's important to consider the Beta value when investing in stocks. Definition Beta is a measure of the volatility , or systematic risk, of a security or portfolio compared to the market as a whole. It is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for stocks. For beta to be meaningful, the stock should be related to the benchmark that is used in the calculation. However, a text-book definition of the concept does not really help us understand what Beta is How to calculate the Beta - To begin with calculating the value, we must first start by spotting the price change of a certain stock in comparison to the market's movement - After a certain period, we collect enough data (grey dotted points), allowing us to plot a trend - With this, we can figure out the relationship between the profitability of the stock we are looking at, and that of the market - Based on the data, we calculate the Beta by dividing the product of the covariance of the stock's returns and the market's returns by the variance of the market's returns over a specified period. Explained Through Examples - We can consider 3 types of stocks: - Stock 1 with a Beta value of 1 - Stock 2 with a Beta value of 0.5 - Stock 3 with a Beta value of 1.5 - We assume that these stocks are all listed on NASDAQ, and the NASDAQ Composite Index (IXIC) moved up by 10% - Stock 1, which has a Beta value of 1, will show the exact same movement paired to that of the market. It reflects 100% of the market's movement - Stock 2, on the other hand, reflects only half of the market's movement, with a Beta value of 0.5 Thus, it moves up by 5% - Stock 3, moves up by 15% as it has a beta value of 1.5, moves up more drastically than the market value, indicating that the stock is more volatile Four Possible Cases for Beta Values - We can consider four possible cases for Beta values: Beta Value Equal to 1 In this case, the security (stock) shows a strongly correlated movement with the market movement. Examples of such securities include Exchange Traded Funds (ETFs) such as QQQ which track the Nasdaq 100 index . Adding a stock to a portfolio with a beta of 1.0 doesn’t add any risk to the portfolio, but it also doesn’t increase the likelihood that the portfolio will provide an excess return. Beta Value Less Than 1 A beta value that is less than 1 means that the security is theoretically less volatile than the market. Having a stock with such beta value helps make a portfolio less exposed to risk. Utility stocks often have low betas because they tend to move more slowly than market averages. Beta Value More Than 1 A beta that is greater than 1.0 indicates that the security's price is theoretically more volatile than the market. As in the example above, if a stock's beta is 1.5, it is assumed to be 50% more volatile than the market. Tech stocks tend to have higher betas than the market benchmark. Having a stock with such beta value exposes the portfolio to more risk, but also higher potential returns as well. Negative Beta Value A security with a negative Beta value means that the stock is inversely correlated to the market benchmark. Prime examples of such securities are inverse ETFs, and certain industry groups such as precious metal mining companies, where a negative beta value is commonly found. Real Life Examples - Based on the explanation above, we can now move on to the following examples of stocks listed on NASDAQ for real life examples: Lulu Lemon (LULU), Tesla Motors ( TSLA ), Amazon ( AMZN ), Costco (COST), ProShare UltraPro Short QQQ ETF ( SQQQ ) - Based on the NASDAQ Composite's movement (IXIC), we can see how certain stocks in certain sectors react differently, in similar trends - In the case of stocks such as LULU and TSLA , we can see that the Beta value is extremely high, as their corrections and impulse moves are severely exaggerated compared to IXIC - Amazon's movement also reflects a high beta value, but not as high as that of TSLA and LULU - COST, on the other hand, seems to have a beta value close to 1, as it follows the movement of IXIC. It's less risky, as the drops are not as severe, but the potential profits are not too high either - SQQQ , on the other hand, is a 3x leveraged ETF that tracks the Nasdaq 100 index . As such, it has an inverse beta value, and shows huge spikes during times of correction for IXIC Limitations of Beta - The beta coefficient theory assumes that stock returns are normally distributed from a statistical perspective, but returns aren’t always normally distributed. - A stock with a very low beta could have smaller price swings, yet it could still be in a long-term downtrend. So from a practical perspective, a low beta stock that's experiencing a downtrend isn’t likely to improve a portfolio’s performance. - While the Beta value is useful in determining a security's short-term risk, it becomes less meaningful for investors attempt to predict a stock's future movements. Conclusion Understanding the concept of Beta is essential in portfolio diversification. A good investor can identify bullish and bearish market trends, and rebalance their portfolio accordingly. A good balance of securities with varying Beta values is imperative for a good balance between risk management and profit maximization.
TVC:IXICEducation
by Michael_Wang_Official
3
Playing Volatility: Making a 2020-Averse PortfolioIn this case we normalize the ratio between SPY and FDLO (one of the better-performing min-volatility etfs of the year) to the start of the year. We can clearly see a shift in favour of a min-volatility portfolio as of late. Performing efficient frontier upon FDLO to narrow down our investments, we see that, for maximizing a Sharpe ratio at the current 3-month treasury bond yield, our best options are (in terms of TICKER, WEIGHT): CI,0.20459 LIN,0.14878 CABO,0.01408 CTXS,0.01166 CLX,0.01038 AKAM,0.00986 DPZ,0.00929 DG,0.00923 ADBE,0.00918 INTU,0.00909 and so on. stats: Expected annual return: 22.8% Annual volatility: 10.9% Sharpe Ratio: 1.90 Minimizing volatility as opposed to maximizing Sharpe gives us more tickers (of course, the portfolio was made to be volatility-averse in general... but not COVID-Recession-Averse). For stats of Expected annual return: 14.1% Annual volatility: 8.5% Sharpe Ratio: 1.42, We see: LIN,0.04622 EQC,0.04516 DPZ,0.03391 CLX,0.03318 VZ,0.03257 WMT,0.03243 CHRW,0.02722 CI,0.02714 CABO,0.02352 DOX,0.02221 CHKP,0.02112 And so on...
AMEX:FDLO
by STOCHASTICU
2
BT became a BUYGood opportunity to buy BT shares at this level - Be aware that the long term chart for BT is bearish so this becomes a risky buy... but I can promise you these are the best prices to buy the stock. If you have any shares already invested in BT then this is a great opportunity to add to your position and benefit from a better average cost. Arrow for directional purposes only. - Contact fro more advice regarding TP & SL. Be clear this is an investment NOT a trade. Know the difference. Happy Monday!
LSE:BT.ALong
by JoelWarby
3