Summary
- Timing is critical—rotating between short-term winners and losers using proven models consistently beats buy-and-hold strategies.
- I showcase three portfolio models: aggressive weekly breakouts, long-term value/growth, and sector-based ETF momentum, each with recent top picks.
- SOXL, NVDA, and BVN exemplify how sector signals, technical analysis, and value algorithms identify high-potential trades across market cycles.
- Diversifying across models and following market signals, not just fundamentals, is essential for strong, risk-adjusted returns in changing markets.
- Following Momentum Gauge signals and sector rotations can help investors avoid downturns and capture gains, especially in volatile markets.
Introduction
“The key takeaway is the same: Short-term winners are losers in the near-term future, and short-term losers are winners in the near-term future. The data validates the theory: Short term reversals are alive and well across a long swath of history!” ~ Gray & Vogel, (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.
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, ranging from aggressive short-term weekly breakouts to long-term growth and value portfolios with high dividends.
Three Trades from Different Portfolio Models
In this article, I provide a sampling of how we use the optimal portfolio models to identify long term continued strength, short term aggressive breakout stocks, and even apply timing models to long-term value stocks for the best results. As I repeatedly tell our investment community, it is important to not only diversify your stock selections, but it is also critical to be where the market fund flows are improving for the best returns. As many long-term traders know well and the chart below illustrates, it is very rare for one type of investment to lead in consecutive years. More details explain our process in my 2025 Market Forecast article. I am certain again this year that we will see more rotation and if you are just riding the buy and hold approach, you can find yourself in a painful situation.
