Riding Lows to Highs

Having the right investment strategy should help investors with minimizing their low and maximizing their high return years. Investors should focus on the best combination of quality, value, and financial strength when making their stock picks to build their investment portfolios.  Also, it’s not necessary that investors place too much emphasis on a specific industry or sector but instead, focus on those fundamental characteristics that are indicative of future outperformance relative to any benchmark. Lastly, investors should be focused on their overall portfolio holdings rather than the performance of a specific stock. It is important not to fall in love with a particular name and to be more concerned about the overall characteristics of the stocks in your portfolio.

Building a winning investment portfolio is not an easy thing to accomplish. However, spending time with quality research tools and placing a strong emphasis on investment fundamentals is a great start. Here at Investoristics fundamental research is at the core of what we do. Consequently, our research efforts are focused on determining the proper number of stocks to hold as well as the best combination of value, growth, momentum, and optimal holding period. Our ongoing research has allowed us to build and continue to offer a great solution to our subscriber base. We recognize that a successful investment strategy is not limited to our approach, but we feel that the best and most successful strategies all have one thing in common, investment fundamentals.

Any good investment strategy should identify stocks that are undervalued at the time of purchase. Validation of your portfolio building skills should be reflected in how your portfolio responds over time in all markets, particularly those that are volatile. If done correctly, your individual stock picks should lead to a solid portfolio that rides market lows to significantly higher returns than the overall market. Also, in difficult markets, portfolio lows should be minimized relative to all other market indices. How has our strategy done in volatile as well as strong markets? During the 2008 financial crisis, our strategy was down only about 2 percent while the S&P 500 was down nearly 40 percent.  The following year, our strategy was up nearly 115 percent, again significantly outperforming the S&P 500 which was up about 26.5 percent. Finally, during the COVID-19 crisis. Our strategy was up nearly 80 percent and at no time was down more than 10% during the year.

The success of our approach is no act of genius but rather our relentless search for those fundamental factors that are key in identifying those stocks that are poised for future outperformance. Is your strategy ready to ride market lows to significantly higher returns than any benchmark? If not, then you are always welcome to Join, “The Collective.”