This article is a website version of our weekly FREE Best Ideas Newsletter sent on 27.06.2023. Sign up here to get it in your inbox every Tuesday.
Is your portfolio up 13.25% this year? Mine isn't, it is about flat for the year
I'm not worried, are you?
If you're worried about your performance so far this year don't be. This performance in the S&P 500 comes from a few mega-cap companies.
At the beginning of June, the 20 largest companies had an index weight of 30%. The total return of the index was 12% but if you exclude the 20 companies the return was -0.2%.
As you can see a lot of tech company hype and AI market euphoria (NVIDEA trading at 210 times earnings!) is mainly driving the market.
If you slept through the S&P 500’s 20% correction in 2022, you'd be forgiven for thinking that we back at the technology market bubble before interest rates started increasing.
I do not own any of them
I don't know about you, but I own no large tech companies.
If you're a newsletter subscriber you know exactly what I own, companies mentioned in the newsletter, quality undervalued small companies worldwide.
Are you worried your returns being left behind? I'm not I don't even have FOMO.
I have long ago given up on chasing the next shiny thing going up now and I suggest you do the same. I have lost too much and had too much emotional stress because of that.
I'm sure it's an experience you can relate to.
What to do now?
So, what can you do now you may be thinking? It’s simple really, just stick to your strategy.
I know it is hard not to second guess yourself when your returns are lagging the market.
I don't it either, but I've given up chasing the current highest returns. Not only have those returns already been achieved, in other words you cannot get them anymore.
And because they are so high there's a big probability and you may be investing just as the trend reverses. But what about a tight stop loss?
You can of course jump in and buy the S&P 500 and with a big position and tight stop loss. But my question to you is, does that fit with your nature and the investment strategy that you've built for yourself overtime.
If it doesn’t you are simply wasting your time and causing yourself undue stress.
There's always going to be a shiny thing beating your returns
There's always going to be an investment strategy outperforming yours! With all the data we have it's easy to compare and find one.
That's not the game you want to play.
All you need to do is stick to your investment strategy with a great track record, that fits your nature, and that you can stick to over the long term in good and bad times.
Now is not the time to doubt yourself
Now is not the time to doubt your strategy or even think of replacing it. You might want to look at a few tweaks you can do to improve it. Like we do here when we test new and strategies or add a new ratio or indicator.
But it's not a good idea to throw away your strategy just because something else is performing better.
Ignore it as much as you can
Just ignore it and move on, implementing your investment strategy.
If you haven't found the right strategy yet here is an article you may find helpful:
How to find your best investment strategy – not the one you expect
From this month on I am going to include a short update on what is happening in the newsletter portfolios.
Quant Value newsletter update
It is hard to believe the newsletter is turning 13 soon, it feels like yesterday when we published the first issue.
A lot of dividends being paid at the moment, less in the USA as the ideas there are all still quite new. The European portfolio currently has a 6.9% dividend return. The highest is Strabag SE (in the portfolio since June 2021) at +30%!
The Asia portfolio has an average dividend yield of 5.8% with the highest 18.5%! With quite a few companies listed in Hong Kong you get the added benefit of no withholding taxes.
Even the Crash Portfolio has an average dividend yield of 5.2%
Shareholder Yield Letter update
As you know the Shareholder Yield Letter is brand new (launched in May 2023) so it’s too soon to say anything. Overall, the portfolio is up 0.5% so far.
Your, helping you stick to your strategy analyst
PS To find great companies that exactly meet your investment strategy right now click here.
PPS It is so easy to forget, why not sign up now before you get distracted?
