The Dow Jones Industrial Average (DJIA) closed Friday’s trading at a 52 Week high – 12,950. It’s had quite a run, indeed, but let’s not forget it’s just an average portfolio. It shouldn’t be the high watermark when it comes to stock performance. To achieve financial success independence your entire portfolio should beat “the market.” Your stock portfolio, therefore, must consistently outperform the DJIA.
Above-average stock returns are most easily had using superior 15-51 construction. Built on that strong foundation, the 15-51 Strength Indicator (15-51i) is an above-average portfolio. And while logic would dictate above-average performance results, the 15-51 Indicator has recently produced an arrogant show of dominance. Take a look below.
The 15-51 Indicator is up an amazing 24.7% in the past 12 months – in a horrible economy and volatile market, mind you – that produced a meager gain for the Dow Jones Average, which ended up just 5.5% during this same period.
That’s what strength does. It outperforms – more and more as time moves on. That’s why you need it.
Superior 15-51 construction is important not just because it produces big stock market gains but also because it allows you to make more money with less risk. Contrary to what Wall Street would have you believe, more risk is not required to earn more reward. The notion that more risk is required to outperform “the market” is nothing short of a sales pitch to sell more mutual funds. And it’s not true.
All you need is superior construction and smart design. It makes making more money much easier. That’s the Lose Your Broker way.
Recall my recent blog on asset allocation where I define a “moderate” portfolio like this:
| Moderate | |
| Asset Class: | % |
| Cash | 60.0% |
| Gold | 25.0% |
| Stocks | 15.0% |
| Bonds | 0.0% |
| Total | 100.0% |
That’s what I call a moderately aggressive portfolio allocation in hostile economic times such as these. The same was true in February 2007. And just like then, above-average construction will outperform an average build over the long-term.
For example, we know that my Keep It Simple Stupid portfolio (KISS) significantly outperformed “the market” over the long-term (five years.) But perhaps this validation is a bit unfair. The compounding effect of above-average construction grows exponentially as the years accumulate (which can be seen here.) This affords investors the opportunity to take less risk and maintain a cash security blanket while still earning above-average investment returns – even in the short term.
Here’s how the moderate KISS portfolio performed in the most recent twelve months.
Yeah it outperformed – but man, look at that stability! KISS outperformed the Dow by an 8.4% to 5.5% margin with 60% in cash, and 15% percent of the Dow’s risk (which has 100% in stocks.)
That’s what smart design and superior 15-51 construction can do for you. More money with less risk and volatility — unlike that basket of mutual funds your broker threw together.
IT’S TIME TO LOSE YOUR BROKER NOT YOUR MONEY.
It is the road to financial independence.
See you there!