A Diversified Stock Portfolio To Beat The Market During August?
Choosing stocks to beat the market during August and summer. A diversified portfolio made on Investopedia stock simulator. So it is a demo portfolio.What is the relevant benchmark? Not easy to answer but could be defined.
As we are in early August the stock market may take a break from high volatility. The idea to build a well diversified portfolio is not a new one. The challenge to beat the market in one month period is rather interesting. What are the pros and cons of this portfolio made with specific role to beat the stock market during August?
The pros of the portfolio
Not one stock is more than 10% of overall capital to invest, which is $0.5 million.
25 stocks in total represent an adequate number so as to diversify.
Both large cap,small cap stocks are bought.
Various sectors and industries, from technology, shipping, industrials, real estate.
The main focus is not on growth but on value, buying only stocks at attractive levels.
The cons of the portfolio
Only long stocks.
Did not short any stock, which may prove not such a good idea.
Naive sometimes diversification of investing no more than 5% of the total capital to each stock.
Examined mainly the fundamental analysis. Only small weight to technical analysis. This could time entries better.
Not taken into consideration lower possible liquidity during August.
Not taken any analyst opinion, rather than me to build this portfolio.
Here is the complete portfolio with purchase prices.
Stock Portfolio and Legal Disclaimer : This is a demo portfolio made to watch performance during August.Stocks were bought on Investopedia simulator and these are not advice to buy or sell,nor does the author hold for real any of these stocks.
Symbol Description Qty Purchase Price
AAPL APPLE INC. 500 $97.39
TNP TSAKOS ENERGY NAVIGATION LIMITED 2000 $4.91
CMRE COSTAMARE INC. 1000 $9.47
PDLI PDL BIOPHARMA, INC. 10000 $3.58
KEP KOREA ELECTRIC POWER CORPORATION SPONSORED ADR 1000 $26.90
F FORD MOTOR COMPANY 1000 $12.08
TRN TRINITY INDUSTRIES, INC. 1000 $22.66
NE NOBLE CORPORATION PLC 2000 $6.79
CNO CNO FINANCIAL GROUP, INC. 1000 $15.68
AAL AMERICAN AIRLINES GROUP, INC. 500 $33.92
BPT BP PRUDHOE BAY ROYALTY TRUST 1000 $15.71
CALM CAL-MAINE FOODS, INC. 400 $41.26
GBX GREENBRIER COMPANIES, INC. 500 $31.59
GILD GILEAD SCIENCES, INC. 200 $79.82
M MACY’S INC 500 $33.29 $32.85
PRU PRUDENTIAL FINANCIAL, INC. 200 $73.76
EQR EQUITY RESIDENTIAL 300 $65.95
VIAB VIACOM INC. CLASS B 400 $43.98
GPS GAP, INC. 800 $24.27
BBBY BED BATH & BEYOND INC. 500 $43.03
LAZ LAZARD LTD CLASS A 600 $34.32
SKX SKECHERS U.S.A., INC. CLASS A 1000 $23.35
GME GAMESTOP CORP. CLASS A 800 $29.51
NRZ NEW RESIDENTIAL INVESTMENT CORP. 1500 $14.00
AB ALLIANCEBERNSTEIN HOLDING L.P. 1000 $22.19
ORIG Ocean Rig UDW LLC 1900 $1.92
What is also interesting is the relative benchmark to use. How to beat the market is relevant. The idea is simple. On an absolute basis best idea is to set a hurdle rate. this hurdle rate could be 1% more than all 3 major US indices, Dow Jones, S&P and Nasdaq. Again it is perfect. But it is measurable. A performance of 2% for the portfolio while for instance S&P closes at 1% gain during August could mean it performed better.Only August will tell and at the end will have full results. Lets not forget that despite lower liquidity during August, there will stock opportunities for both sides, buy and sell.