How Did Our Model Portfolios Hold Up During the Market Crash?

Investors have endured the steepest stock market collapse in the shortest period of all-time.

Worse than the 2008 financial crisis, the dot-com bubble, Black Monday of 1987, and even the 1929 stock market crash. It was gratifying then, based on a broad survey of attendees to our VectorVest International Online User Group Forum, that since the beginning of March, 45% of our capacity turnout said they tightened their Stops and raised cash. The timeframe was after VectorVest issued a Confirmed Down Call/C/Dn in all our countries. Additionally, 26% maintained their original Stop-prices and Sold when they hit. Those results suggest most VectorVest investors had a trading or investment plan, and they stuck to it. Bravo!

We have five Model Portfolios in Canada, all uniquely designed to serve as a guide for different investment styles, processes, and goals. They all have well-defined rules. Let’s look at their performance during this period.

Here are the YTD numbers, not including Dividends, up to and including Monday, April 13^th:

#1 Aggressive – +19.4%. Green Light Buyer/GLB Market Timing. Buys Long and Sells Short.

#2 Conservative – +8.6% GLB Market Timing. Buys Long only and Goes to Cash on C/Dn Call.

#3 Retirement – (-7.44%) Confirmed Calls Market Timing. Buys Long only and No Action on C/Dn Calls.

#4 Conservative – (-10.7%) Confirmed Calls Market Timing. Buys Long only and No Action on C/Dn Calls.

#5 Prudent – (-1.5%) RT Kicker Combo Market Timing. Buys Long and Sells Short.

Portfolio #1 Aggressive

The long search is Ballistic New Highs-RS. When the Confirmed Down Call/C/Dn came on Friday, February 28^th, it closed all ten long positions the next trading day, Monday, March 2^nd, and opened ten short positions using IG Plungers/CA. Of the ten short positions, seven were winners, all with a 20% Gain or slightly more. The losers lost about 10% each. With three new green lights starting March 6^th, as per GLB timing, we now hold ten stocks long. With an ARR of 28.8% over eight-plus years, I do not see the need for any significant changes to this trading system.

Portfolio #2 Conservative.

Buys long only on C/Up Calls with Pale Blue Chips – RS. It sold all ten holdings on March 2^nd, six winners and four losers. As per its GLB timing, it began buying again on March 2^nd. It currently holds five positions, all in the green ranging from Newmont Gold/NGT, up 4.7% to Intact Financial/IFC, up 14.9%. Since its inception, this system has a 67%-win rate and an ARR of 25.5%. Of all the portfolios, this one gives investors the most peace of mind during a Confirmed Down Call. Its ARR since inception is 27.4%, not including the dividends, outstanding especially for a Conservative portfolio. No changes needed.

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Portfolio #3 Retirement

Buys long only on C/Up Calls with High CI Rising Dividends and uses the SELL rating as its STOP. With ten open positions, two stocks sold at the February 28^th C/Dn Call, and the rest on March 9^th or later when they hit their Stops, including Intact Financial/IFC and Granite Realty/GRT.U which had been in the portfolio since 2017. Eight of the ten Sells closed with gains. With a 19.3% ARR, this portfolio is delivering income and dividend growth for retirement-minded investors at a reasonable Max Drawdown. No big changes needed.

Portfolio #4 Conservative

Buys long only on C/Up Calls with Steady Eddies, and uses the SELL rating as its Stop. With ten open positions, it sold two on the February 28^th C/Dn Call and the rest on March 5^th or later. Five were winners and five losers. The average Dividend Yield of all sold positions is over 3%, so for income investors, this portfolio is meeting the need. It currently holds no positions. With an ARR of 23.6%, the Max Drawdown since inception is 17%, not awful, but perhaps leaves some room for tweaking for a Conservative portfolio.

Portfolio #5 Prudent

Buy long on the RT Kicker Combo signal and Sells short with Crash landers/CA. The Stop on longs is VST<1.20, which can be a wide Stop, especially on quality stocks. From the trade history, we can see that short positions started to open on March 11^th and continued until March 17^th. Four shorts made money, and three lost money. With an ARR 30.9%, perhaps investors will not mind the Max Drawdown of 20%, but I think we may want to do some tweaking after the Coronavirus experience.

Copied below is a Performance Report table that allows you to compare all five portfolios. Now you can quickly see, HOW DID OUR MODEL PORTFOLIOS HOLD UP DURING THE MARKET CRASH?

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