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Our
Service
The TradeGuru
service offers active investors a simple and effective approach to capturing
the powerful advances which are characteristic of leading stocks. Our
GuruFolios are automatic 10-stock portfolios you rebalance
once every 4 weeks. Following the TradeGuru
System is therefore very easy and the rewards can be quite remarkable.
There are thousands
of stock-picking strategies based on anything from astrology, exploiting
short-term imbalances, fundamental analysis, spotting breakouts or overbought/oversold
situations, to throwing darts. We don't advocate any of those. Our founders,
Frank Minssieux and Dr. Serge Dacic, are long-term students of the markets
and computer scientists (see "About
Us" page for more details on our principals) and they also have a
track record of devising successful trading models. For example, they
pioneered the innovative Trend Timing index investing method and their
first service, TimingCube,
is a well respected leader in this field.
Whereas TimingCube
relies on technical analysis to time the broad market using index-based
ETFs and mutual funds, TradeGuru
GuruFolios are invested at all times and are made of individual
stocks selected with fundamental analysis.
Our typical subscribers
are not the long-term buy and hold type of investors, and they do not
have the patience to sit on the same positions for months or years to
get results. They want action but do not have the time or desire to spend
their days studying charts and trading. Using our service, they set and
rebalance a portfolio of stocks once every 4 weeks. And for those who
do not have the time or inclination to trade themselves, MARKETTREND
Advisors offers TradeGuru
money management.
There are no prerequisites or particular experience requirements, and
no complicated methodology to learn. Yet the returns the Gurufolios
have generated are very spectacular. Because of this combination of simplicity
and outperformance, we believe that the GuruFolios approach
belongs to any investor's portfolio. You
could start with as little as a few thousands of dollars but for diversification
reasons (and to keep costs under control) typical investors allocate $50,000
or more to the System. Your money can be in regular accounts or any qualified
retirement accounts that allow trading of individual stocks. Thanks to
the inherently limited downside risk and the fact that funds are not tied
up for long periods of time, the TradeGuru
System is well suited for managing portions of a retiree's egg nest.
The selection of our
GuruFolio stocks is driven by our proprietary System for
which we do not disclose the details. Our System exclusively looks at historical
fundamental data to select the stocks we recommend. It performs top down
company selection based on valuation and leadership fundamentals such as
earnings growth.
GuruFolios consist of carefully selected baskets of 10
stocks which are meant to be monitored and rebalanced only once every 4
weeks. Rebalancing consists of trading up your account to match the then
current collection of stocks in the GuruFolio by selling
those that are no longer listed and replacing them with the new ones. On
average, 4 out of 10 stocks are new each 4-week period. With GuruFolios
we are always fully invested with a constant number of positions, and we
monitor and trade on a known fixed schedule, once every 4 weeks.
Our "Results"
page shows the returns for two sample 10-stock Folio A
and Folio B portfolios. Each portfolio was started on January
4, 2002 and rebalanced every subsequent 4-week period. Returns for Folio
A are live since January 2006 and backtested before then. Folio
B was also introduced in January 2006 and was relaunched on December
1, 2008 using an updated stock selection algorithm. Returns for Folio
B are live since that date and backtested before then.
Our Broad Market Gauge will note when the market is unhealthy and gains less likely to occur through both the color of the Gauge and the note underneath.
TradeGuru
publishes a short Weekly Commentary after the close of
the market on Fridays. This commentary is posted on our Web site and also
sent to you by e-mail.
Our stock recommendations
are companies listed on the AMEX, NASDAQ or NYSE stock exchanges. From the
vast universe of stocks trading on these major U.S. exchanges we apply our
stringent requirements to narrow the field to the few candidates that have
the very best prospects for significant short-term price advances. Most
importantly, we require our candidate stock picks to be the cream of the
crop. There may well be many undiscovered gems out there with the potential
for great future earnings and stock appreciation, but we do not have time
to wait for the market to discover them. To make our short list, a stock
must have demonstrated outstanding leadership characteristics such as top
earnings growth as well as leading return on equity for their shareholders.
We begin with stocks with share prices over $5 and market capitalizations
of at least $200M for sufficient liquidity. Beyond that the fundamental
criteria we apply seek to identify good profitable businesses which are
growing and offer good value, a company profile we can summarize as growth
at a reasonable price (GARP). Folios A and B,
by offering a slightly different bias can provide subscribers an opportunity
to select a category they favor more. In a nutshell, Folio A
stocks are screened more for their growth and momentum attributes, while
Folio B stocks tend to be especially good values. A rare
but possible occurrence is when a stock is included in both the A
and the B Folios, which can happen when a stock uniquely
combines leading momentum with top value.
In order to allow
subscribers to start implementing their own portfolio at any time, the GuruFolios
are updated daily to insure they, at all times, represent the 10 best stocks
in their category. The current selection of GuruFolio stocks
is available on the "GuruFolios" page. Once started,
investors only have to rebalance their stocks once every 4 weeks and therefore
do not need to check the current GuruFolio stock selections
on a daily basis. Very often, a stock will disappear from the current list
only to be selected again a few days later. This is simply due to to the
fact that our screening process has to select exactly 10 stocks per GuruFolio
on any given day. When a stock barely makes the cut, it can easily move
in and out of the daily listing. This is completely normal and does not
indicate that a stock that no longer appears in the daily listing has suddenly
turned bad and should be sold immediately: once you buy a GuruFolio
stock, you should keep it for 4 weeks, even if it disappears from the daily
listing a few days after you bought it.
Our historical numbers show an average periodic turnover of about 40%, meaning
that about 4 stocks out of 10 are new every 4 weeks.
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GuruFolios Implementation |
Implementation with
GuruFolios consists of deciding how much money you want
to invest with the strategy and how many individual stocks you will hold
at all times. Frequently, subscribers will simply buy the 10 stocks in Folio
A or B, or all 20 for large accounts. GuruFolios
are like automatic portfolios. You establish your portfolio initially from
the listed stocks on the "GuruFolios" page and
you forget about them. No e-mails, no daily chores. Every four weeks you
rebalance your portfolio to reflect the then current stocks on the "GuruFolios"
page. Sell the positions that are no longer on the list and buy the new
ones. That's it.
To summarize, here are the step-by-step instructions to follow in order
to implement the GuruFolio System:
- Log in to the
TradeGuru
Web site and go to the "GuruFolios" page
- Create your
own portfolio by choosing stocks in the current Folio A
and Folio B listings. Between the 2 GuruFolios,
you can select up to 20 stocks. We provide the industry sector for
each stock so that you can build a diversified portfolio.
- Buy and hold
the selected stocks for 4 weeks
- When the 4-week
holding period is up, log in to the TradeGuru
Web site again and go to the "GuruFolios"
page
- Rebalance your
portfolio by selling the stocks that are no longer part of the current
list and replace them with new Folio stocks.
- Repeat step
4 and 5 every subsequent 4-week period
Additional implementation notes:
- Since the returns
vary from trade to trade, over time your allocated amounts (e.g. $10,000
per position) will grow unevenly and from time to time you may want
to do some housecleaning and rebalance them
- An alternative
to buying stocks that some investors prefer are options. For convenience,
we flag the GuruFolio stocks that are optionable in
the latest daily listings shown on our "GuruFolios"
page
- Another piece
of information we provide about our stocks is their industry sector.
As explained in the "Do
you select industry sectors?" FAQ, at times our System will tend
to naturally favor the best companies in areas that are outperforming
the rest of the market. Strategies vary between going with the flow
and letting the sector allocations ebb and flow freely and keeping an
even sector distribution by cherry picking which of our stock recommendations
you follow.
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A Better Approach
to Investing
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Less Risk, More Return
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Performance Matters
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