June Record Setting Performance Update
The portfolio had an impressive month with a 41% average return in a single month...
As per usual, here is the most important chart telling the story of the Active Portfolio (AP).
The Active Portfolio (AP) had a great June, with a 41% return in a single month as several stocks recovered from tariff war pullbacks, rising past their previous highs.
We started the AP with a $100,000 model assumption on May 22, 2022, which has now turned into $265,000 in 3 years had you followed every move with the appropriate weightings.
Remember, the AP will hold somewhere between 10 and 20 stocks that are hand picked by our team from the broader universe of stocks we track in the MSMqi (currently over 100 stocks) and appropriately 2,000 additional stocks outside the MSMqi.
Mind you that the Active Portfolio consists of weighed stock positions, thus the performance can be influenced by the larger weighted positions. But, as a stock picker, that’s what you want.
The AP is also maintaining its lead over our original 2022 Cliff Note Passive index (MSMqi) with ease, showing that picking certain stocks from the index and assigning portfolio weights is delivering the alpha an active portfolio should deliver.
However, as expected, at times, the volatility of the AP can be greater, since the stocks in the MSMqi are equally weighted.
The chart we will show below also illustrates that sometimes you have to let the stocks in an active portfolio marinate a little bit before they really start to contribute.
Here is the performance of the active portfolio since inception, versus the MSMqi👇
Moreover, as opposed to the Cliff Note index, the AP delivers clear simulated buy and sell decisions, via email and substack chat alerts.
After locking in some nice wins and shedding some losers, the AP is flush with cash, ready to make some more moves.
Portfolio moves
We removed two stocks from the Active Portfolio in June and made one Side Pocket trade this month. They are discussed in the below post.
More On Side Pocket Trades
In June, we also alerted members to a new side pocket trade. These trades are outside of the AP that might not fit the overall strategy of the AP, but could provide extra alpha as a shorter term trade. Furthermore, at times the AP may be fully invested, so we highlight Side Pocket opportunities for those subscribers that still want to make moves outside the AP.
In June we added MIND as a Side Pocket Trade and closed the trade in 12 days for a return of over 33% return.
Below, you can see all the previous Side Pocket trades. On average the trades returned about 13%. We think that’s some respectable short-term alpha on top of the performance that the active portfolio is delivering.