![]() Taiwan Semiconductor Manufacturing ( TSM)Īs you can see, there is very little overlap between the 3 portfolios. This is a tech-heavy growth-stock portfolio. I was curious to see, not only how Zacks recommendations fared against the market, but also against continuing to hold my long-established positions. The average position had been held for about 3 years at the time the study began. Here is my own portfolio, used as a control group. I assume this means their ratings had been downgraded, then upgraded again, during the two-week window in which I was assembling the mock portfolio. There were several New Strong Buy picks that occurred more than once. Note that these two Zacks portfolios are nicely diversified across a number of different types of businesses, cap levels, and price points. Infrastructure and Energy Alternatives ( IEA) All prices shown are closing prices as of October 1, 2020. I was curious to see, not only whether the two Zacks portfolios doubled the major indices as advertised, but also whether they outpaced my stocks, which I had already been holding for an average of 3 years. ![]() I compared these two portfolios against 4 benchmarks: the Dow, the S&P, the NASDAQ, and my own portfolio. (The 1st of the month would have been better, but I have more pressing things to do on those days.) I then took a reading of the closing price on every stock in all three portfolios, on the 20th day of each month. I set a start date of October 1, with an assumption that the same amount was invested equally into each stock on both lists. Over those same two weeks, I also made note of all the Bull of the Day recommendations. Some stocks were recommended more than once, so there turned out to be 34 such companies on the list. So for the latter half of last September, I took note of all the New Strong Buy recommendations, and built a mock portfolio from them. If you sign up for the Zacks newsletter, they will email you a Bull of the Day and 5 new Strong Buys every trading day. Zacks claims that their system has produced returns of 25.6% per annum over the past 33 years, doubling the S&P 500. These ratings are subject to change on a daily basis. Only about 5% of all stocks are rated as Strong Buys at any one time. They do this mostly by tracking increases or decreases in analysts' earnings estimates.Įvery stock Zacks covers (which includes the vast majority of publicly traded securities) is given a rating from 1 to 5, where: Whereas the Motley Fool is strictly buy-and-hold, with a horizon of at least 3 - 5 years, Zacks seeks to maximize returns over the next 30 - 90 days. Philosophically, Zacks Investment Research is at the opposite end of the continuum from the Motley Fool. What are their philosophies? What are their approaches? What are their time horizons? Tracking Zacks So I became curious about other advisors. In other words, they benchmark themselves and show you the results, in real time.īut they are also buy-and-hold investors, with a long-term approach that does not work in all situations, especially when I need cash for a vacation, a recording project, a new car, etc. As soon as I signed up as a subscriber, I had access to every pick they have made for the past 3 years, the date the pick was made, its gain or loss, and the S&P's gain or loss for the same period, all on one scoresheet so it's easy to compare. There was never a need to benchmark their stock picks. It was a great place to start, and I have had great results (average investment has gained 269%). ![]() When I started my investing journey 5 years ago, I signed up with the Motley Fool. So if you are trying to learn who to listen to, one of the surest ways to evaluate who knows what they are talking about is to benchmark their recommendations against well-known indexes or portfolios. But regardless of how you make your investment decisions, you and you alone are responsible for the outcome. ![]() It is not easy to sift through the clamor and find a fruitful path. There is no shortage of advice available on stocks and strategies, and much of it is conflicting. Instead, I let the professional investors do that, and then I carefully weigh their recommendations before making a decision. Because my life is about something other than investing, I don't have the time or the tools to sift through mountains of data looking for the best investment ideas on my own. It is only a lucrative part-time job for me. ![]() I am not a full-time professional investor. (1) Know what you are talking about, or (2) know who to listen to. There are two ways you can make money as an investor. Zakokor/iStock via Getty Images What's an investor to do? ![]()
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