TSP Institutional Portfolio

You can think of the TopStock Institutional Portfolio as your own private growth fund and a core position in your investment strategy. You see, we’ve taken an institutional investment strategy and brought it to you – the individual investor. So, why pay all those hefty management fees when you’ve got a better insitutional portfolio available that YOU can control?

However, while the portfolio utilizes an institutional approach to equity management (and has beaten the pants of the average mutual fund), the method is surprisingly easy to follow.

While the stock market can be challenging at times, our TopStock Institutional Portfolio has proved successful in most every market environment. And I’ll let you in on a little secret – managing an “institutional level” portfolio really isn’t that hard! Perhaps the best part of the portfolio is it only takes about 15 minutes a week.

Hello, my name is David Moenning and I have been been managing “other people’s money” in the stock market at my firms since late 1987. Frankly, during this time, I’ve seen an awful lot of investment strategies come and go. But in early 2005, after 18 years of investing in bull markets, bear markets, and everything in-between, I came across the simplest, most effective way to manage stocks that I had ever seen.

I was skeptical at first (you don’t stay in this business very long without a healthy dose of skepticism) so I spent months researching what is now the TopStock Institutional Portfolio system. I even hired the country’s largest independent institutional research firm to thoroughly test the strategy. And when all the due diligence was complete, I concluded that this simple, easy to use system for owning the market’s top rated stock was a winner.

How the TopStock Institutional Portfolio Works

The strategy is easy to summarize: Instead of owning the biggest companies in each sector – as the S&P 500 Index does – our plan is to own the BEST companies in each market sector (i.e. the “TopStocks”).

Each week the computers crunch the numbers and rank every stock in our universe in terms of earnings strength and company performance. Our goal is simple: We want to identify those companies that are truly tops in their category.

It is important to note that we do not employ the typical “earnings momentum” type of formula that became so popular in the early 1990’s. Our proprietary TopStock system is extremely robust and cannot be found in any newspaper or public website. The TopStock system for determining a company’s earnings strength and performance incorporates hundreds of indicators, including the analysis of:

  • Earnings Estimates
  • Revisions to Earnings Estimates
  • Momentum of Earnings Revisions
  • Measures for Earnings Surprises
  • Upside Potential for Earnings Estimates
  • Company Momentum
  • Industry Performance

From there, our research team painstakingly analyzes each of the top rated stocks on an individual basis. We review the charts from a technical perspective. We review Wall Street’s current research and brokerage ratings (we have access to most of the Street’s important research), and we check our long-term fundamental models. While it takes an enormous amount of time and energy, the goal is to identify the top stocks in the sector.

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 put it succinctly, only those stocks with the strongest performance and earnings strength “make it” into our TopStock Institutional Portfolio.

What Got My Attention: Institutional Sized Returns

Before I decided to go “live” with this concept, I hired the largest institutional research firm in the country to conduct an independent test of the system. The test found that by making small adjustments to the portfolio each week, the system had impressive results.

Between 12/31/1995 and 12/31/2004, 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 a cumulative gain of +449.2% – which is average annual compound rate of return of more than +18.5% per year! This beat the pants off the S&P’s return of just +102.7% or +7.32% per year over the same time period.

TopStock Institutional Stock Strategy
System Test Results
For the Period 12/31/1995 – 5/31/2005



S&P 500

1996 +30.55% +20.30% +16.31%
1997 +31.55% +31.01% +25.06%
1998 +31.66% +26.67% +22.86%
1999 +40.20% +19.53% +38.09%
2000 +14.78%  -10.14%  -16.22%
2001    -6.13%  -13.04%  -22.95%
2002  -13.10%  -23.37%  -28.63%
2003 +33.14% +26.38% +27.01%
2004 +19.56%   +8.99% +7.18%
2005 +16.23%   +3.00%   +6.18%

+449.16% +102.73% +64.34%

Return calculations are based on system testing through 5/31/05 and model portfolio results thereafter. Please see important notes below on the limitations of system testing. Our live trading results shown above represent model portfolio values  Past performance is not a guarantee of future results.

This means that by focusing on the TopStocks in each market sector, one would have outperformed the market by more than +346% . Not bad for a strategy that only requires about 15 minutes a week!

Try the TopStocks INSTITUTIONAL Portfolio Today!

Putting My Money Where My Mouth Is

Before I opened my mouth about this exciting portfolio strategy of owning the market’s top stocks to my firm’s sales reps, my clients, or my newsletter subscribers, I decided it was important to put my money where my mouth was. So, on May 31, 2005, I opened an account with $50,000 of my own money (I wanted to keep the amount small enough to prove that you don’t need a zillion dollars to make money in the stock market) and the TopStock Institutional Portfolio was born.

Below is a table illustrating the results of actual account performance from 5/31/05. There is nothing hidden and all commissions and fees were paid out of the account as I went. So to be clear, these are real-life returns and are net of commissions and fees.

To be honest, it hasn’t been a great time for the stock market. However, the performance results show that the strategy can dramatically outperform in a short period of time.

Top Gun Institutional Portfolio
“Live” Trading Results

(For Period 5/31/05 – 12/31/10)

S&P 500
Cumulative Return +47.93% +5.55%
Live trading results reflect the return of the actual control accounts and include the payment of all commissions and account administrative fees

Do TopStock Rankings 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 performed by one of the country’s largest independent institutional research firms.

TopStock Ratings


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%

We Tell You Exactly What We’re Doing

Every Monday, we send members a TRADE ALERT! detailing the changes that we are making to the portfolio. It’s that simple. We tell you what we’re buying and what we’re selling.

We Publish Performance

At TopStockPortfolios.com, we believe that performance is job # 1. And unlike so many newsletter services out there, we don’t hide our performance. Every week we will send a Portfolio Roundup which includes a summary of any changes that we’ve made as well as the current performance to the portfolio.

To sum up, we do all the legwork, we you EXACTLY what we are about to do and why, and then we follow it up with a performance summary every week.

What You Get with this Service

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
      • Position Size
      • TopStock Rating

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 TOP 100 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

Risk Management Strategies Are Built In!

Perhaps the best advice we can provide investors is simple: Stop Feeding the Bears!

As the saying goes, “sometimes the best offense is a good defense.” So, in addition to a powerful stock selection strategy designed to outperform by a wide margin in Bull markets, the TopStocks Institutional Portfolio also has a risk management strategy built into the portfolio for when the Bears begin to growl.

Our disciplined sell strategy is actually pretty darned simple. You see, we have no tolerance whatsoever for stocks that are 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.

The TopStocks Method Identifies Winners

By constantly focusing on the TopStocks of each market sector, we have been able to consistently identify opportunities for profit. Highlighted below are some of the profitable positions in our TopStocks Institutional Portfolio as of 3/3/2006.

TopStock Institutional Portfolio
Winning Positions
(Actual Position Returns as of 3/3/06)


Advanced Micro Devices AMD +48.71%
American Tower AMT +17.72%
Bear Stearns BSC +29.83%
Broadcom BRCM +27.46%
Burlington Northern BNI +35.56%
CSX Corp CSX +21.10%
Cummins CMI +20.32%
E-Trade Group ET +56.59%
Express Scripts ESRX +57.97%
Fluor Corp FLR +37.04%
Goldman Sachs GS +31.25%
Lehman Brothers LEH +39.46%
Merrill Lynch MER +27.93%
Nvidia NVDA +28.93%
Reynolds American RAI +30.69%
Rio Tinto RTP +24.78%
Schlumberger SLB +27.18%
Southern Peru Copper PCU +25.95%
Texas Utilities TXU +115.01%
Terex TEX +31.15%

As one can readily see, the TopStocks Institutional Portfolio identifies winners. By continually keeping your portfolio focused on the TopStocks of the market, you will ensure that you stay away from languishing stocks that can inhibit a portfolio’s return. We prefer to focus on our battle cry, “Own the best and ignore the rest!”

Let’s Talk Price

The TopStocks Institutional Portfolio is a “pro level” portfolio that can easily replace those closet-index funds in your portfolio. And instead of paying asset managers 1% of your portfolio, you can run your own institutional portfolio for just $349 a year, which is less than $30 per month!

So if you are looking for an easy way to invest the exciting world of TopStocks, be sure to give this service a try!

Try the TopStocks INSTITUTIONAL Portfolio Today!