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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: sixty2nds who wrote (8726)	9/10/2024 4:54:18 PM
From: Sun Tzu	2 Recommendations Recommended By Johnny Canuck sixty2nds Read Replies (2) \| Respond to of 10529

I think much is to be learned from how the SP500 is managed and why so few fund managers are able to beat it. Let's look at SPX: To be included in SPX, a company has to meet profitability and liquidity conditions. The company should have been around for a decade or more AND it must have maintained profitability for most the last business cycle, including the current year. That is the fundamental filter. Nothing too fancy. But it is there. Secondly, the company has to be a leader in their industry. The fact that S&P takes in only the largest companies is essentially a management test. If the management was ineffective, then they would not have been able to outmuscle their competition. Thirdly, S&P uses TA and momentum. The index is cap weighted. Which means it automatically adds to the winners and cuts down the losers. Finally, they cast a wide net. They choose 500 companies across every industry, but most of the investment is concentrated in the top 10 or 20 winners. Add all this up and it makes a fantastic recipe. . Unlike many "gurus" on the net, I put my money where my mouth is, and I am very open about what I trade and when. Currently I am 25% cash. My top holdings are listed below. I have almost 100 holdings, but 15 stocks make up about 50% of my holdings. So the remaining 85 accounts for only 25% of my holdings. And while I have some great losers (and some great winners that you don't see in this list), they don't matter much because they are small make little impact. All of them are less than a year old. You can judge for yourself how well the portfolio is doing.