Summary
- Using the proprietary value and momentum models, we can outperform the S&P 500 by leveraging timing across fundamental, technical, and behavioral signals.
- Gold and basic materials have led YTD returns, but healthcare and biotech are now showing strong breakout signals, suggesting a rotation into these lagging sectors.
- Highlighted stocks and ETFs – like GDXU, LABU, CGAU, IAG, RCUS, and FULC – demonstrate the power of combining value and momentum signals for both short-term and long-term gains.
- For optimal returns, I recommend aligning trades with positive market and sector gauges, then confirming with MDA breakout signals on individual stocks or ETFs.
- Even in the best investments, timing matters greatly for both long-term value and short-term breakout strategies.
Introduction
Consider value and momentum, for example, which are negatively correlated. Ideally, you want a portfolio with stocks that have high exposure to both these factors and to avoid those with negative exposure.” ~ Berkin & Swedroe, (2016)
Timing matters, and it matters greatly. I have spent the last 35 years trading, researching, and constructing algorithms to identify and leverage the value across fundamental, technical, and behavioral finance models. Of the ten portfolio models designed for optimal portfolio mixes for members to beat the market at Value & Momentum Breakouts, eight come from enhancing well-tested anomaly research in published financial journals. All of the models continue to outperform the S&P 500 in live forward testing here on Seeking Alpha and again this year.
If you believe, like I do, that there is much more to stock trading than just buy, hold, and hope that every future event works out perfectly as promised for your stock, then these trading models are for you. This article highlights some of our recent top trades from three very different portfolio models. These portfolios range from aggressive short-term weekly breakouts to long-term growth and value portfolios with high dividends across both stocks and exchange-traded funds.
