The TopStock FlexPro Portfolio is one of our “Alternative Asset Class” Portfolios. In short, these portfolios invest in a wide range of asset classes and most definitely are not limited to just stocks.
The portfolio strategy for the TopStock FlexPro Portfolio allows complete flexibility in terms of asset allocation. You see, there are no predetermined guidelines whatsoever as to the level of stocks, bonds, cash, regions, countries, sectors, or even asset classes in the portfolio! In short, this is a completely flexible portfolio designed to follow the performance trail wherever it leads us.
The portfolio consists entirely of low-cost, tax efficient ETF’s (Exchange Traded Funds) with an overall objective to “own the best and ignore the rest.” More specifically, from a universe of over 600 ETFs, the TopStock FlexPro Portfolio will own only the top performers.
Own the Best and Ignore the Rest
One constant in investing is leadership is always on the move. Thus, it is vital to employ a system that can adapt to ever-changing environments. For example, everybody knows that whatever was hot last year is often this year’s dog.
However, it is important to recognize that this is not your typical “buy what worked best last week” type of approach (which, in our opinion, is fraught with risk). The momentum formulas we utilize are longer-term oriented and are designed to create positions that can be held for an average of 3-6 months at a time.
We utilize a momentum-based strategy due to the long-term reliability of the approach. You see, over time (we’re talking about years, not weeks or months), a momentum-based system will automatically adjust to leadership trends. Unlike valuation, fundamental, or economic variables, price is unique in that it cannot diverge from itself (I.E. If price is headed lower, it cannot be considered a good thing… unless of course, you happen to be short!). Thus, a momentum approach locks onto major leadership trends allowing profits to run and losses to be cut relatively short.
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How the TopStock FlexPro Portfolio Works
The approach to our FlexPro Portfolio is very straightforward.
At the beginning of each week, every ETF in our universe is ranked in terms of relative strength and momentum. Next, we create a list of the top 20%. From there, our team reviews each for liquidity and technical health.
It is important to note that while the rankings of the ETF’s are done by computer, the final allocation decision rests with the manager who will take risk factors and current market conditions/themes into account when creating the portfolio. Thus, this is not a “black box” approach to investing.
Next, we compare our existing holdings to each of the week’s TopStock “contenders.” If one of the new kids appears to offer more upside or has a substantially higher rating, we don’t hesitate to make a change.
To sum up, we do all the legwork, we tell you EXACTLY what we are about to do and why, and then we follow it up with a performance summary every week.
Let’s Talk FlexPro Performance
I have been running “other people’s money” since late 1987. And frankly, I’ve seen an awful lot of investment strategies come and go. After 20 years of investing in bull markets, bear markets, and everything in-between, in early 2006, I came across the simplest, most effective way to manage multiple markets that I had ever encountered.
But before I decided to go “live” with the strategy, I hired the largest institutional research firm in the country to conduct an independent test of the system. The test found that by making minor changes to the portfolio each week and then re-balancing the portfolio on a monthly basis, the system had impressive potential.
Between 1/1/96 and 12/31/06, which was a period that contained one of the greatest Bull Markets of all time and the worst Bear Market in a generation, the strategy would have produced an annual compound rate of return of more than +24% per year. (And for the record, at that rate, based on the “rule of 72,” a portfolio doubles in value every 3 years!) Not bad for a strategy that only requires about 15 minutes a week to follow!
The test was enough to convince me to go live with the portfolio. While the world of ETF securities is relatively new, the flexibility afforded by these vehicles makes them extremely popular among investment professionals. So, in the beginning of 2008, we began to offer the portfolio to newsletter subscribers. Below is a combination of the historical testing we did from 1996 thru 2006 as well as our live returns from the begining of 2007.
The above return calculations are based on independent system testing through 5/31/06 and live model portfolio results thereafter. It should be noted that although the System Test was performed by an independent company, test results do not represent actual trading, do not take into account payment of commissions nor reinvestment of dividends, have inherent limitations, and are for informational purposes only. Our live trading results shown above represent the implementation of the model portfolio trade alerts. Past performance is not a guarantee of future results.
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Risk Management Strategies Are Built In!
Our disciplined sell strategy is actually pretty darned simple. You see, we have no tolerance whatsoever for a position that is not “technically healthy” from a chart standpoint. Thus, whenever one of our holdings moves into a downtrend or breaks important support — we sell the stock, no questions asked.
While it may sound simplistic, this “bottom up” or stock-by-stock approach to managing risk causes us to automatically reduce exposure to market risk during bear markets. And since one of the best ways to make money in the long run is to avoid losing big money in the short run, this approach is an easy way to protect your net worth during bear market periods.
So, if you are looking for a portfolio with no limits (and no excuses) as to where it can invest, coupled with a disciplined risk management system, the TopStock FlexPro Portfolio may be just the ticket.
What You Receive:
Before anyone becomes a member of our service, we feel it is important for them to understand exactly what they will be getting from us. So here’s a summary of the reports you will begin receiving once you’ve signed up for a free-trial:
Real-Time Trade Alerts – We send a real-time ALERT! via email BEFORE every trade we make. These live reports tell members EXACTLY what we are about to do and why we are doing it. And to avoid any conflicts, it is our policy to wait until after we have received the ALERT to actually enter our trades. Each ALERT! includes:
- Company Name
- Ticker Symbol
- Limit Price
- Position Size
- The Reasoning Behind the Trade – We believe it is vital to understand the reason WHY a trade is being made
Weekly Round-Up – Every week we update members on trading activity, current holdings, and performance of our portfolio.
Daily State of the Markets – As a TopStockPortfolios.com member, you’ll receive our “Daily State of the Markets” market analysis and commentary each morning BEFORE the opening bell.
All the TSP Reports – In addition, you can choose to receive any or ALL of the following reports: (just click on the reports you’d like to receive in Your Account)
- Breaking News – Up to the minute market news
- Technical Talk – Stay on top of the key technical levels on the charts
- What’s Driving Today’s Market – The key story of the day
- The Big Picture Report – Stay in tune with major market cycles
- Daily Stock Pick – Our pick of the day
- Daily Focus List – The TopStocks we’re watching today
- The 10.0 Report – The REAL “Best of Breed”
- The Risk Manager Report – Understand the Risk/Reward environment
- TSP Market Model Roundup – We quantify the current market
- The Insiders Report – What are the “insiders” buying?
- Daily Upgrade/Downgrade Report – Stay on top of stocks “in play”
- Earnings Scorecard – Who “beat the street” and who “missed?”
- The TSP 100 – The FlexPro0 stocks (updated monthly)
- The TSP Smart Sector Report – Keeps you in tune with market leadership
- TSP IRA/401(k) Portfolios – TSP Portfolios for your long-term assets
- Top Stories – Never miss an economic report or top story
- TSP Sneak Peeks – See what’s inside of TSP portfolios
Let’s Talk Price
The TopStocks FlexPro Portfolio is a “pro level” portfolio that can easily replace your brok-er recommendations and those mutual funds in your portfolio. In short, you can be your portfolio manager for just $399 a year.
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