When this portfolio is fully invested, it contains 20-25 of the biggest and most juicy growth stocks that we can find. We seek out the best Large-Cap growth stocks in the world today. These positions are equally weighted within the portfolio. These stocks must have both excellent momentum and value.
This portfolio is best suited for Conservative Growth Investors that have a time horizon of at least 3-5 years. Large-cap stocks are generally less volatile than small and mid-cap stocks, but they obviously still have risk.
This is an actively managed portfolio. We keep a shorter leash on these stocks to protect on the downside, but we seek long-term capital gains wherever possible.
We will also do our best to protect this portfolio from the next recession and bear market. We cannot guarantee anything, but we will raise cash and employ inverse index or sector ETF’s when we feel that the U.S. economy is headed into a recession. The S&P 500 went down 53 point during the last recession.
We cannot protect investors from normal sell-offs (5-20%) along the way, however. These are secondary reactions within a Primary Trend. There have been many such sell-offs during the last ten years, but during that time, the S&P 500 has gone from 660 to over 3,000. Every sell-off over the last ten years has been a buying opportunity.
We will do some selling and raise cash during short-term sell-offs as a precautionary measure. We do have a line-in-the-sand on all our holdings. While extremely important, this protection could cost you some performance over the long haul, however. That is the trade-off for having such downside protection.
The next bear market will more than likely be of a similar magnitude as that one. We do not intend on riding it down like most passive styles of investing will.
This portfolio was started on January 1, 2009. Year by year results can be found in our weekly Best Stocks Now newsletter. Click Here to get two free issues.