Sneak Peek: TSP Top 5 Portfolio

On occasion, TSP allows all visitors to "sneak a peek" inside one of our portfolios. This is not a promotional piece on the service, but rather a live look into what the portfolio owns at this very moment and how it is performing. This week, we let visitors take a look at the weekly roundup of the top performing TSP Top 5 Portfolio...

Give yourself (and your portfolio) a boost this year. Here's the link to Try the Top 5 Portfolio -- Free For 30 Days

 

Top 5 Portfolio Members:

For the second week in a row, we did not make any moves in the portfolio this week. With the market continuing to move higher, we decided to stick with our current positions and to wait for some sort of a pullback before putting on any additional long exposure.

The portfolio currently holds a modest cash position as we have 80% invested in our favorite "TopStocks" and 20% in cash.

Looking at performance, despite our cash position our concentrated portfolio was up about 1% again last week, is up +4.42% for the month, and is now up +5.06% for the New Year (vs. +3.13% for S&P and +1.89% for DJIA). Longer-term, the portfolios is up +113.19% from inception on 1/1/2006, while the S&P 500 has declined -7.89% during the same time frame. Thus, the portfolio has outperformed the market by +121.07%. And finally, over the last market cycle (beginning of the bear market), the portfolio has outperformed the S&P 500 by 23.87%.

Wishing you all the best for a profitable week.

David D. Moenning
Founder TopStockPortfolios.com

 

TopStock Top 5 Portfolio -- Performance Update

Results are as of the close of business Friday.

TopStocks Top 5 Portfolio Performance Summary

Period Top 5 Portfolio S&P 500 2006 +46.27% +13.62% 2007 +42.64% +3.53% 2008 -12.68% -38.49% 2009 +11.38% +23.45% 2010 +5.06% +3.13%   Cumulative Return +111.39% -8.79%

 

TopStock Top 5 Portfolio -- Current Positions

Below is a summary of the positions held in the portfolio as of Friday's market close.

TopStocks Top 5 Portfolio Current Portfolio Positions Sector/Stock Symbol % of Port Cost Basis Industry Top Stock Rating New Member Rating Consumer Discretionary Johnson Controls JCI 15.0% $28.49 Maunfacturing Auto Parts 9.6 Hold Materials Cabot Corp CBT 15.0% $26.30 Diversified Chemicals 10.0 Hold Technology Apple AAPL 20.0% $194.86 Computer Hardware 4.0 Hold Consumer Staples Hansen Natural HANS 15.0% $39.03 Soft Drinks 4.8 Hold Health Care Intuitive Surgical ISRG 15.0% $326.15 Health Care Equipment 4.9 Hold Current Cash Reserve 20.0% TopStock Rating: The TopStock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 - 10.0 with 10.0 being the highest.   New Member Rating: Our "New Member Rating" (the last column on the right) is designed to let members know our current view on each stock - assuming we do NOT currently hold the position. Buy: We would be willing to buy the stock at current levels. Accumulate: We would be willing to start to accumulate a position in the stock at current levels. However, we would not want to buy a full position at the current time and would look to add to a "starter position" on weakness. Hold: We are willing to hold the stock, but we would not be buyers at this time. Sell: We are not happy with this position and are looking for an exit point. Cost Basis: If the portfolio holds multiple positons in a stock, the Cost Basis will reflect the average cost. In addition, the Cost Basis have been adjusted for dividends.   Ownership Disclosure: At the time of publication Mr. Moenning and/or affiliated companies own long positions in all the companies mentioned. Positions may be bought or sold while this publication is in circulation without notice.

 

About the TopStock Top 5 Portfolio

The management strategy for the TSP Top 5 Portfolio is really very simple… We start with the concept of “own the best and ignore the rest” and then take it up a notch (or three). In short, we select just one stock from each of the market's top 5 sectors and hold these stocks until either (1) the stock breaks down into a downtrend or (2) a higher ranked stock becomes available.... who says profitable investing had to be hard?

One of the biggest benefits of this is whenever a stock gets "on a roll,” we will continue to hold that stock for bigger gains. And make no mistake about it; this is still a TopStock portfolio. We adhere strictly to our strategy of owning only the top rated stocks in terms of earning strength and company performance.

Managing Risk: It is also important for new members to understand that we have a defensive strategy in place in the TSP Top 5 Portfolio. Although the portfolio has displayed the ability to outperform the market by a large margin during positive market environments (the Top 5 system was up +108.6% in 2006-07 vs. +17.6% for the S&P 500), there are times where it is important to play defense. In short, we don’t make “market calls.” Instead, we use a bottom-up, stock specific method. Whenever one of our holdings breaks down into a downtrend on a chart basis, we sell the stock. This approach WILL create whipsaws on occasion, but it will also keep us out of big trouble if things become grizzlier in nature.

 

Do TopStock Ratings Really Matter?

We certainly think so, but sometimes it is best to let the numbers do the talking. Below is a table showing the average annualized returns for each rating category, as determined by historical testing done by one of the country's largest independent institutional research firms.

TopStocks Ratings TopStocks Rating Average Annual Return 9.0 - 10.0 +32.9% 8.0 - 8.9 +23.2% 7.0 - 7.9 +11.9% 6.0 - 6.9 +10.5% 5.0 - 5.9 +6.6% 4.0 - 4.9 +4.1% 3.0 - 3.9 +2.7% 2.0 - 2.9 -0.4% 1.0 - 1.9 -5.3% 0.0 - 0.9 -6.6%

 

The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStocks Trading and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

The performance of the TopStock Ratings are linked monthly price changes of equal weighted hypothetical portfolios consisting of those stocks with the indicated TopStock Rating assuming monthly rebalancing zero transaction costs. Results do not include dividends and are from the time period 12/31/95 through 6/30/02.

The returns shown for the Top 5 in 2006 and 2007 are a hypothetical implementation of the portfolio strategy allocating equal portions of the portfolio to the Top 5 positions. Returns after 1/1/2008 through 9/30/2008 are hypothetical implementation of trading alerts based on actual transactions made by the editor in other live newsletter portfolios and are before commission costs. The results after 9/30/08 are hypothetical implementation of portfolio strategy based on the editor's published trading alerts. Hypothetical returns do not reflect actual trading. Please note that hypothetical test results do not take into account market conditions which could adversely affect management decisions.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

Index returns are price only and do not include the reinvestment of dividends. The S&P 500 is a stock market index containing the stocks of 500 large-cap corporations, most of which are US companies. The index is the most notable of the many indices owned and maintained by Standard & Poor's, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 companies that have their common stock included in the index.