What a quarter it's been in the markets. The FTSE has had a good run gaining 7.1% and equity investors everywhere have started licking their lips over the gathering momentum in the wake of further lashings of quantitative easing around the world. When stock markets go up, there are stocks, sectors and strategies within them that do even better. As it's our mission to highlight what works when in the markets, let's take a look at how effective Stockopedia's model portfolios of the Investing Masters have been performing.
We keep hammering home at how important it is to use quantitative investing tools in your investing process. Instead of listening to brokers, tipsters and rumours and being swayed by the Siren song of the stories they sell, using a dispassioned common sense stock screening process can help impove the gullible, emotional and easily influenced human decision maker at most of our cores. Learning to defer (or at least listen) to the 'quant' can often help to improve profits in tough markets such as those we are seeing today.
Stockopedia beats the market again
Our 3 month performance can continually be tracked at this link, and as of the time of writing we can see the continued strong outperformance of some classic investing strategies. 72% (43/60) of our long only strategies have beaten the FTSE 100 with gains of between 7.1% and 23.4%, while all 5 of our short selling strategies have beaten it on the downside - again indicating how important it is to avoid fundamentally weak, near bankrupt stocks with potentially dodgy earnings - no surprises there!
At the top of the tables it's been a story of quality, dividends and contrarianism trumping growth and momentum but for how long that remains to be seen. We have just rebalanced our model portfolios which we do every quarter, so lets take a closer look at how they've done.
Contrarianism and Dividends pay
One of the best books on my investing table is David Dreman's Contrarian Investment Strategies - it's a massive font of evidence that shows that buying cheap, out of favour stocks just works so incredibly effectively. Is it such a surprise that two of his very unfashionable strategies have been the top performers over the summer with gains of over 21% in 3 months?
Strong fundamental health…