With the year 2021 behind us comes the time for balancing. For the U.S. stock market, it was again a time of incredible growth, when indices have reached all-time highs. Furthermore, the results of our stock picking strategies reached the desired values and beat the expected long term results.
In this article, we present the performance of our stock portfolio in the year 2021. For live trading, we always use a report with a monthly forecast, which is generated on the first day of the month and contains stocks ranked from the most undervalued to the most overvalued, based on our AI stock valuation model (these stock scores can be viewed in the StockPicking Lab application). Thus, the presented portfolio is rebalanced 12 times a year. The initial capital was $ 100,000.
We present the results of our 2 live strategies and one hypothetical strategy:
- AP 20 Longs, which consist of 20 most undervalued stocks and should gain the highest yield.
- AP Balanced strategy, which should gain an average yield of 14% p.a. and eliminate large market dropdowns using a “break” consisting of short trades*.
- AP 20 Shorts, hypothetical results, this (not applied) hypothetical strategy consist of the 20 most overvalued stocks.
- SP 500, which presents our benchmark, Index S&P 500.
Chart and results are not linearized = all yields have been reinvested. CAGR represents the Compound annual growth rate, i.e. the average annual growth rate of an investment over a period of more than a year (in this case just one year).
Stock picking and the strategies based on it are successful if stocks identified as undervalued outperform the market and stocks identified as overvalued underperform. As can be seen from the above results, the StockPicking Lab and the stock values for each stock meet these assumptions. It should be noted that this year the results of the index reached the values of our AP 20 Longs strategy. To see our results in the previous 13 years, please read this article.