What is it and how do stocks qualify?
The High Growth Model Portfolio consists of the top 20 ranked Australian stocks from my database of around 500 companies. A stock’s ranking is determined by a combination of fundamental metrics that my extensive testing suggests are most correlated to a companies performance combined with a technical overlay based on the 3EMA strategy. The metrics I look at are:
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Screenshot: A small segment of the 500 stock database |
The model consists of the best of the best. However, just because a stock isn’t in the top 20, doesn’t mean it isn’t a worthy investment. A stock with a ranking of greater than 100 may still be viable, but overall is less likely to perform as well as a stock within the top 20. My testing suggests that as a cohort, the stocks in the top 20 outperform the next 20 stocks which outperform the next 20 and so on.
Sometimes even the best stocks experience periods of negative sentiment. As part of the portfolio, a technical overlay is employed. That way, if a stock falls below a certain level, the overlay is there to protect the overall portfolio. Good stocks fall for a lot of reasons in the short-term. A stop-loss is there to stem-losses in the event the falls in share price are a precursor to period of longer-term underperformance. Should time prove that not be the case, the stock will have the opportunity to re-enter the portfolio after the share price has returned to an up-trend.
Why have model portfolios?
The model portfolios are not provided for people to just blindly follow. They are there as learning tools. Look at the stocks they contains and their performance. Put them through your own filters and see if any resonate with your own approach to the market.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.