ETFs That are Better Than Random Scattershot

May 24, 2024

Before we move on to the next portfolio I might trade live, I have one more example of thoughtful versus random.

In our last Newsletter, we saw that a carefully-picked portfolio of individual stocks that have beaten the market over a decade is currently beating the market (while a random high Short Interest portfolio is doing much worse than the market).

But some people don’t like individual stocks.

And I get it: individual stocks are more risky.

ETFs don’t usually go to zero. As we’ve seen in the high Short Interest portfolio, single stocks definitely do go to zero sometimes.

So here’s a portfolio of ETFs that I also created in January of this year. This group is made up of ETFs that have beaten the market over the previous five to ten years.

Again, all of these could be considered worthwhile picks. It’s not a bunch of wild things chosen with fingers crossed.

Here’s that portfolio from January 2024:

How has that portfolio done since January?

As of this writing, almost all of them are beating the market on their own, and a portfolio of these ETFs is also beating the market (12.1% to 10.9%).

We can accept the universal law of scattershot bell curves, but we can put some thought into it instead of just trusting randomness.

Is that a better way?

So far in 2024, it definitely seems so.

We’ll discuss some automated strategies I like in next week’s Newsletters.

Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.