So, one month into my more momentum focused stockrank rules based approach, how has it gone, and what can be learned?
Performance
A month ago the portfolio was sitting at £68,700, today it is at £70,500, a gain of about 2.6% (or about . In that time, the FTSE 100 has gone up 0.3% (or 2.6% if you start a day later and finish a day earlier). It has also outperformed the 90-100 stockranks based on the last month. Not too bad, but most of the growth was early, and it's been pretty flat since
Sells during the month
The first to go was NWF (LON:NWF) in early July. It was sold (at a solid but unremarkable 14% profit) as its momentum rank fell below 80. It’s stock rank then bounced back very quickly as the share price recovered from the dip it took, until a few days ago when it dipped again. I would have said this was an incorrect sell, except for the portfolio value is now sitting at more than 15% under the 52 week high, one of my key sell rules for balanced shares. All in all, probably the right decision, but at the wrong time?
As a result of the momentum rank bouncing back so quickly with NWF, I decided to suspend my sell rules based on stockranks until review at the end of the month, although sell rules based on price remained. This reviewing rather than constant monitoring system hopefully gives shares more of a chance to recover, particularly as momentum rank seems to move around a fair bit for some shares.
The second was Vitec (LON:VTC) , sold mid-July at 32% profit. It was a conservative share at the time, and sold because it dropped 10% from its high. However looking at it now, it is now categorised as a balanced share (and historically seems to have usually been balanced). As such, if it was still in my portfolio I would have kept it as the cut off for a balanced share is 15%, and it is currently 11% off its high. That said, until yesterday it was closer to 15% off its high, so mostly went down since selling. I'll be interested to see how it fairs in the next few months…
