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SECTOR INVESTING FOR MAXIMUM PROFITS


We focus on Sector Investing Strategies using proprietary Money Flow, Momentum and Relative Volume indicators to select Stocks and ETFs. The portfolio can go long or short depending on market conditions. A small select group of 2x Index ETFs are also key parts of our portfolio mix.


Follow the Top 3 Sector Portfolio, with a return of +211% from the March pandemic low (3/23/20) up 228% in the past 2 years and +244% past 4 years as of 4/13/21.

All charts and data updated daily to keep you in touch.


Mission:


Highest Total Return thru Sector ETFs in industries that disrupt, innovate and improve the way the world works. One example: ARKK - Ark Innovation ETF.

Our #1 holding, ARKK is up 504% past 4 yrs. That's a 126% per year average return.




TOP 3 SECTOR PORTFOLIO MARKET REPORT


We publish our market report every day, usually around Noon, as it allows time for the market to find its 'balance' for the day. Oftentimes the first hour of trading does

not establish the trend for the day. On highly volatile sessions, we will also post a closing report around 5:30 pm Eastern time.


Always check our Sell Stops section of the Top 3 Sector Portfolio for the latest information. Another area to review is the "Hot Charts Of The Day" for stocks and ETFs currently in the news and getting high money flows. We also publish the

Reddit and WallStreetBets stocks with the highest mentions in past 24 hours.


We send a daily morning email to our subscribers. Please sign up for the Top 3 Sector Portfolio daily alert at the end of our website. We will also send an intraday

email alert if market conditions change, or we revise our sell stops or purchase

a new security.


One more thing: we do use a very limited amount of 2x ETFs in our trading. These are

for experienced traders only. It's much safer to use the 1x proxy for most

that are new to trading.


Best Sector ETFs In 2021*


#1 Retail XRT +43%

#2 Energy XLE +29%

#3 Builders ITB +28%

#4 Russ 2x UWM +28%

#5 Banks KBE +24%


Laggards:

Bonds -11%, Biotech -5%, GDX -1%


SP500 11%, QQQ +8.5% for 2021.



*This is our select list of representative sector and index ETFs. We do not cover every sub- sector. We also look for lowest expense ratios and highest relative strength in selecting ETFs.




Best Stocks In 2021*


#1 AMAT 55%

#2 M 47%

#3 KBH 47%

#4 DE 42%

#5 GM 41%


Laggards: AMD -11%, XLNX -9%, QCOM -10%


*These select stocks are chosen for their representation of key Sectors, and large

trading volume. We are aware that not all stocks are covered. These bellwether stocks show where the big money is flowing.



HOT CHARTS TODAY



MODERNA MONSTER


Up 48% from the 3/8/21 tech/bio low. and a blistering 762% from 3/23/20.



Chart Key For All Charts:


Green line: 21 Day Moving Avg

Orange: 50 DMA

Pink: 100 DMA

Blue: 150 DMA

Red: 200 DMA


Blue horizontal lines represent support or resistance, can also be used for suggested sell stops. In most cases, we will use the 'middle' line for the first sell stop. But each investor must decide based on their position size and risk level. Sell 1/3 or 1/4, let

the rest ride as they say.





CLOVER HEALTH pops 27%, Reddit Mentions up 12,000%







MARKET DASHBOARD

Friday 4/16/21 Market Close





The Dow rose 165 points to a new record high at 34,200, SP500 also a new

high up .4% to 4,184, Russell small cap up .15% to 224.65 on the IWM.


A pause day and a split market as most indices flatlined for the session.

The Adv/Decline line was 1800/1500, Oil -.2%, Bonds -.8% as teh 10 year

yield climbed back up to 1.57% but still in a tight range. The VIX closed

at 16.09 after briefly dipping below 16 intraday.


In terms of sectors, Builders had the best performance today, up 2.5%, then Materials 1.2%, Europe 1% and GDX still rising up 1%.


Downside: Biotech -1.5%, ARKK -1.6%, Cloud -1.3% and Soc Media -1%



Market respects the bullish trend


Dow +164.68 at 34200.67, Nasdaq +13.58 at 14052.37, S&P +15.05 at 4185.47


[BRIEFING.COM] The S&P 500 (+0.4%) and Dow Jones Industrial Average (+0.5%) set intraday and closing record highs on Friday in a mechanical grind higher to end the week. The Nasdaq Composite (+0.1%) and Russell 2000 (+0.3%) posted smaller gains.

There's a saying on Wall Street that loosely goes, "the trend is your friend until the end." Well, the trend in the S&P 500 has been extremely bullish over the past three weeks, and despite an absence of strong buying conviction today, the market found a way to respect the trend.

Nine of the 11 S&P 500 sectors contributed the advance, including the lightly-weighted materials sector (+1.2%) as the only sector to gain more than 1.0%. Value stocks outpaced growth stocks, evidenced by the 0.6% gain in the iShares S&P 500 Value ETF (IVE 145.60, +0.82), versus the 0.2% gain in the iShares S&P 500 Growth ETF (IVW 69.98, +0.16). The SPDR S&P Homebuilders ETF (XHB 75.11, +1.59, +2.2%) was a pocket of strengt

h, rising 2% to all-time highs, following the better-than-expected housing starts and building permits report for March, which showcased a 30.8% m/m surge in multi-unit starts.

On the downside, the information technology sector (-0.03%), which is the most heavily-weighed sector in the S&P 500, limited the index performance with a fractional decline amid a rebound in long-term interest rates. The energy sector (-0.9%) was the weakest performer amid lower oil prices ($63.16, -0.28, -0.4%).

The 10-yr yield increased four basis points to 1.57% after dropping 11 basis points on Thursday. The rebound appeared to be technically-oriented since the Treasury market barely reacted to the encouraging housing data. The 2-yr yield increased two basis points to 0.16%. The U.S. Dollar Index decreased 0.2% to 91.54.

This curve-steepening activity provided support for the financials sector (+0.7%), which included disappointing reactions to better-than-expected earnings reports from Morgan Stanley (MS 78.59, -2.23, -2.8%), BNY Mellon (BK 46.07, -1.94, -4.0%), and State Street (STT 80.47, -6.04, -7.0%).

In other corporate news, Cisco (CSCO 52.80, +1.16, +2.3%) was upgraded to Outperform from Peer Perform at Wolfe Research. Boeing (BA 148.18, -2.93, -1.2%) struggled after Reuters reported that aircraft inspectors found wider electrical issues with the 737 MAX than originally suspected. Reviewing Friday's economic data:

  • Housing starts surged 19.4% month-over-month in March to a seasonally adjusted annual rate of 1.739 million units (Briefing.com consensus 1.621 million), bolstered by a 15.3% increase in single-family starts. Building permits increased 2.7% month-over-month to 1.766 million (Briefing.com consensus 1.750 million), helped by a 4.6% increase in single-family permits.

  • The key takeaway from the report is that it reflects a quick snapback from the weather-induced downturn in February, which is indicative of otherwise strong industry conditions that are being driven by strong demand for new homes.


  • The preliminary reading for the University of Michigan Consumer Sentiment Index for April checked in at 86.5 (Briefing.com consensus 88.0), up from the final reading of 84.9 for March. This is the highest reading in a year and was paced by improved attitudes on current conditions that were helped by job gains, rising vaccination rates, low interest rates, and fiscal stimulus.



SECTORS UP TODAY

Builders +1.3%, Mat'ls 1.2%, Transports .6%


SECTORS DOWN

ARKK -1.7%, Cloud -1.4%, Internet -1%, Software -1%, Soc Media -1%,

Bonds -.7%, Biotech -.7%





STOCK INDEX PERFORMANCE FOR 2021 YTD


DOW JONES +11%

SP500 +11.5%

NASDAQ 100 +8.5%

RUSSELL 2000 +14%



STOCKS IN THE NEWS TODAY

Click on stock name for real time quote


"Morgan Stanley (MS) — Morgan Stanley topped analysts expectations for first quarter earnings on the back of better-than-expected bond trading results, sending shares up in the premarket. The major U.S. bank reported earnings of $2.19 per share on revenue of $15.72 billion.


Sunrun (RUN) – Shares of the residential solar company jumped 3% after Simmons Energy upgraded the stock to an “overweight” rating. In a note to clients, the firm said the company has a strong growth story ahead, and that the recent weakness presents an attractive buying opportunity.


Cisco (CSCO) — Cisco shares rose 1.1% in premarket trading Friday after Wolfe Research upgraded the equity to “outperform.” Analyst Jeff Kvaal wrote that “Strong IT spending should prove a tailwind to Cisco estimates” through fiscal year 2022 and said shares should climb to $63, representing a 22% upside from Thursday’s close.


PNC Financial (PNC) — The bank stock dipped 1.9% in premarket trading even after PNC beat estimates on the top and bottom lines for its first-quarter report. PNC reported $4.10 in earnings per share on $4.22 billion in revenue. Analysts surveyed by Refinitiv had penciled in $2.75 per share and $4.12 billion in revenue. The bank’s net interest margin declined and missed expectations, according to FactSet.


Comcast (CMCSA) — Shares of Comcast rose 1.2% before the opening bell after Raymond James upgraded the stock to an “outperform” rating and told clients it expects strong first-quarter earnings results from the media giant. “We believe there is future NBCU upside from HSD strength, Peacock sub growth, improved theatrical revenue, and phased theme park reopenings,” wrote analyst Frank Louthan.


Simon Property Group (SPG) — Shares of the real estate company rose in premarket trading after Jefferies upgraded the stock to “buy” from “hold.” The Wall Street firm said “retailer investments, pent-up consumer demand, and lower bad debt are positive catalysts” for the mall owner.


Bank of New York Mellon (BK) — Shares of the bank ticked up 1% in premarket trading after Bank of New York Mellon beat analyst estimates in its first quarter report. The firm earned 97 cents per share on $3.92 billion in revenue. Analysts surveyed by Refinitiv were looking for 87 cents per share and $3.85 billion in revenue.


United Airlines (UAL) — Shares of the United Airlines popped in premarket trading following an upgrade to “buy” from “hold” from Argus. The Wall Street firm said it likes the airline’s plans to limit capacity, reduce structural costs by $2 billion, and restore margins to pre-pandemic levels.


Coinbase (COIN) — Shares of the newly public cryptocurrency exchange dipped in premarket trading on Friday. The weakness came despite another vote of confidence from popular investor Cathie Wood, whose Ark Invest purchased about $110 million of the stock on Thursday." CNBC.COM 4/15/21




Sector ETF Performance Today


SECTORS UP TODAY

Builders +1.3%, Mat'ls 1.2%, Transports .6%


SECTORS DOWN

ARKK -1.7%, Cloud -1.4%, Internet -1%, Software -1%, Soc Media -1%,

Bonds -.7%, Biotech -.7%






Select Stock* Performance Today


STOCKS UP

TOL +2.4%, CSCO 2.4%, KBH 2.2%, LLY 2%, WDC 1.6%, DIS 1.6%, TGT 1.4%


STOCKS DOWN

TDDOG -5.8%, SNAP -3.5%, SQ -2.5%, ROKU -2.5%, TEAM -2.2%, TWTR -2%,

TSLA -1.8%









BREAKING NEWS LINKS



FRIDAY MARKET ACTION


APPLE CAR MYSTERY - COULD BOOST STOCK


RETAIL SALES FOR MARCH EXPLODE BY 10%

DUE TO STIMULUS CHECK SPENDING


ARK'S CATHIE WOOD BUYS $241 M IN COINBASE STOCK ON IPO DEBUT


SPACE CO'S BRING IN $1.9 BILLION IN Q1


WHAT IS COINBASE AND HOW DO I BUY CRYPTO?


JNJ VACCINE CAUSES BLOOD CLOTS, INJECTIONS HALTED


APPLE ANNOUNCES APRIL 20 EVENT FOR NEW

PRODUCT REVEAL


BOEING SALES OF AIRCRAFT PICK UP



FUNDSTRAT'S TOM LEE EXPECTS 'FACE RIP' RALLY


WHEN TO SELL A WINNING STOCK?







Sector ETF Performance From 3/23/20 Pandemic Low

- Past 12 Months


Let's take a look at how all Index and Sector ETFs have done since the March Pandemic low on 3/23/20. This is how we measure current performance in

the Top 3 Sector Portfolio,


NOTE: We like to use significant pivot lows (not a calendar) to evaluate true performance, as those kind of 'Armageddon' sell downs tend to level all sector ETFs and stocks to ground zero. The 3/23/21 date is such a low.

#1 Russ 2x UWM +356% - not bad for an ETF past 12 months.

#2 Nasdaq 2x QLD +270%

#3 ARK Innno ARKK +257%

#4 Retail XRT +241%

#5 Builders ITB +199%


SP500 +86% QQQ +100% IWM Russell +123%


Worst: Bonds -16%, Dollar -12%, Defense -10%,









TOP 3 SECTOR PORTFOLIO UPDATE


As of 4/16/21, the Top 3 Sector Portfolio is up 208% from the 3/23/20

March low. The SP500 is up 86% same time frame.


Our #1 holding is ARKK, up 269% since the March lows, #2 QLD up 264% and

nearly catching ARKK, #3 is Social Media SOCL +179%. The Top 3 Sector portfolio is beating the SP500 benchmark by 126% from the March lows. It's up 234% in the past 2 years and +253% past 4 yrs.


While we are very pleased with our performance, we are also acutely aware

of just how high the stock market has risen. Indeed, the latest Flow Show report from B of A Securities show total global equity inflows over the past five months ($576 billion) has exceeded total inflows for the past 12 years ($425 billion). We still expect a significant pull back off these overbought conditions. Caution is warranted going forward.



New Buys:

B. QID @ 23.15 on 4/14/21 (1/2 position)

B. XBI @ 130.12 on 4/14/21 (1/2 position)


New Sells


Sell Stops

QID - S. @ 22.35

XBI - S. @ 124.38

QLD - S. 1/3 @ 125.53

FDN - S. 1/3 @ 227.05


Measuring Performance:

We are now tracking the Top 3 Sector Portfolio performance from the 3/23/20 March low, in order to show the most recent activity in the last 12 months.


TOP 3 SECTOR PORTFOLIO

Gain from 3/23/20 low to 4/16/21 (past 12 months)


Asset Allocation: Since the March lows of 2020, our Top 3 performing ETFs are: QLD +267%, ARKK +257% and SOCL Soc Media +178% in the past year.


We put more money in the top 3 ETFs as you will see in the portfolio below,

where #1 QLD has an allocation of 27% of the portfolio, #2 ARKK has 18%

and #3 SOCL has 12%, for a combined total allocation of 57%.


This is an extremely aggressive weighting. It is also why we are up 208% in the past 12 months in an 'all ETF' portfolio.



Total Return Top 3 Sector Portf +208% SP500 +86%

Beating SP500 benchmark by 122% from 3/23/20 low



TOP 7 STOCK PORTFOLIO

From 3/23/20 low as of 4/16/21 (Past 12 months)



Total Return Top 7 Stock Portf +113% SP500 +86%

Beating SP500 by 27% from 3/23/20 low




TOP 7 STOCK PORTFOLIO UPDATE



New Buys



New Sells

Sell Stops







BEST DIVIDEND ETFs - 1 YEAR PERFORMANCE


The #1 best performer for dividend etfs was Schwab High Dividend SCHD, now

up 88% in the past 12 months, with a 2.7% dividend. This ETF is highly concentrated

(the secret of its outperformance) with the Top 10 representing a whopping 46% of

the entire ETF. We own the Vanguard Dividend Cap Appreciation etf VIG in Top 3 Sector Portfolio, it's up 69%.


We also like the SDIV - Super Div Stock etf, up 71% with a 6.8% dividend.



Dividend ETF performance past 12 months:






Top 10 Holdings Schwab Dividend ETF - SCHD:




SECTOR ETF PERFORMANCE FROM THE 3/8/21

TECH SELL DOWN



One of the key investing strategies of the Top 3 Sector Portfolio is to identify market lows and identify which stocks and ETFs rise first and fastest off that low.


Here's a perfect example. The table below that shows how sectors performed from the 3/8/21 Tech sell down low. Note the Sectors that are rising the fastest off that low, which enables you to spot the early leaders after a market turn, as well as the laggards, which we need to sell or avoid altogether.


From the 3/8 low:


#1 2x QQQ QLD +28%

#2 Builders ITB 18%

#3 Semi's SMH 17%

#4 Gold Min GDX 14%

#5 Software IGV 13%


So in the last month since March 8, QLD (2x QQQ) is strongest, up 28%, followed by Builders ITB at 18%, and Semi's at 17%.


Laggards:


Two sectors stand out: Energy XLE -8.5% showing the rotation from Oil to Tech,

and Banks KBE -3%.


SP500 +8.5% QQQ +13.5% IWM +2% as Russell lags badly past 4 wks



Sector ETFs off 3/8 Tech Low:







KEY STOCK INDEXES SP500, Nasdaq, Russell 2000



SP500 - SPY Chart: Up 87% from 3/23/20 low. New high today

at 417.26:






NASDAQ 100 - QQQ Chart: Rising 102% since March lows, corrected 11.5% to 150 DMA, then a 14% pop:






RUSSELL 2000 SMALL CAP INDEX - IWM


Rising 134% from the March low, consolidating at 50 DMA now.







HOT CHARTS BROAD MKT- STOCKS/ETFS

BREAKING OUT




GDX gets buy signal on MACD:








Nvidia now up 40% in past 4 wks, big upgrade today 4/15/21.







'REDDIT' HOT CHARTS TO WATCH TODAY


Stocks Trending on Reddit/WallStreetBets

Greatest % Increase In Mentions Past 24 Hrs


See All Mentions - Link to "Memeberg Terminal"



Reddit Largest % Change in Mentions


Quantumscape QS+

MP Materials MP-

FuelCell Energ FCEL-

Palantir PLTR

Tesla TSLA-



WallStreetBets


20 yr bond etf TLT-

Clover Hlth CLOV

AMC Entertn AMC+

Adv Micro AMD++

Li Auto LI-


*Stock showing above average price movement, * is up - is down, ++ and -- indicate

a more extreme move.



REDDIT, WALLSTREETBETS HOT STOCKS PERFORMANCE TODAY


Rising: CLOV +20%, NVAX 13%, MRNA 7%


Going downtown: ZOM -13%, PINS -10%, DISCB -6%





AMC back in the spotlight:






Sector Performance From The 3/23/20 Pandemic Low

- Past 12 Months


Let's take a look at how all Index and Sector ETFs have done since the March Pandemic low on 3/23/20. This is how we measure current performance in

the Top 3 Sector Portfolio,


NOTE: We like to use significant pivot lows (not a calendar) to evaluate true performance, as those kind of 'Armageddon' sell downs tend to level all sector ETFs and stocks to ground zero. The 3/23/21 is such a low.

#1 Russ 2x UWM +356% - not bad for an ETF past 12 months.

#2 Nasdaq 2x QLD +270%

#3 ARK Innno ARKK +257%

#4 Retail XRT +241%

#5 Builders ITB +199%


SP500 +86% QQQ +100% IWM Russell +123%


Worst: Bonds -16%, Dollar -12%, Defense -10%,





BREAKING NEWS LINKS



FRIDAY MARKET ACTION


APPLE CAR MYSTERY - COULD BOOST STOCK


RETAIL SALES FOR MARCH EXPLODE BY 10%

DUE TO STIMULUS CHECK SPENDING


ARK'S CATHIE WOOD BUYS $241 M IN COINBASE STOCK ON IPO DEBUT


SPACE CO'S BRING IN $1.9 BILLION IN Q1


WHAT IS COINBASE AND HOW DO I BUY CRYPTO?


JNJ VACCINE CAUSES BLOOD CLOTS, INJECTIONS HALTED


APPLE ANNOUNCES APRIL 20 EVENT FOR NEW

PRODUCT REVEAL


BOEING SALES OF AIRCRAFT PICK UP



FUNDSTRAT'S TOM LEE EXPECTS 'FACE RIP' RALLY


WHEN TO SELL A WINNING STOCK?







TOP 3 SECTOR PORTFOLIO UPDATE


As of 4/16/21, the Top 3 Sector Portfolio is up 208% from the 3/23/20

March low. The SP500 is up 86% same time frame.


Our #1 holding is ARKK, up 269% since the March lows, #2 QLD up 264% and

nearly catching ARKK, #3 is Social Media SOCL +179%.


The Top 3 Sector portfolio is beating the SP500 benchmark by 126% from the

March lows. It's up 234% in the past 2 years and +253% past 4 yrs.


While we are very pleased with our performance, we are also acutely aware

of just how high the stock market has risen.


Indeed, the latest Flow Show report from B of A Securities show total global equity inflows over the past five months ($576 billion) has exceeded total inflows for the past 12 years ($425 billion). fcelWe still expect a significant pull back off these overbought conditions. Caution is warranted going forward.


We made two purchases on 4/14/21, QID and XBI. QID is an inverse ETF and as

such, we plan to hold it for a short term trade. Only for experienced investors. The

1x corollary to QID would be PSQ - 1x short QQQ. XBI is a small cap Biotech etf.



New Buys:

B. QID @ 23.15 on 4/14/21 (1/2 position)

B. XBI @ 130.12 on 4/14/21 (1/2 position)


New Sells


Sell Stops

QID - S. @ 22.35

XBI - S. @ 124.38

QLD - S. 1/3 @ 125.53

FDN - S. 1/3 @ 227.05


Measuring Performance:

We are now tracking the Top 3 Sector Portfolio performance from the 3/23/20 March low, in order to show the most recent activity in the last 12 months.


TOP 3 SECTOR PORTFOLIO

Gain from 3/23/20 low to 4/16/21 (past 12 months)


Since the March lows of 2020, our Top 3 performing ETFs are: QLD +267%,

ARKK +257% and SOCL Soc Media +178% in the past year.


We put more money in the top 3 ETFs as you will see in the portfolio below,

where #1 QLD has an allocation of 27% of the portfolio, #2 ARKK has 18%

and #3 SOCL has 12%, for a combined total allocation of 57%.


This is an extremely aggressive weighting. It is also why we are up 208% in the past 12 months in an 'all ETF' portfolio.



Total Return Top 3 Sector Portf +208% SP500 +86%

Beating SP500 benchmark by 122% from 3/23/20 low



TOP 7 STOCK PORTFOLIO

From 3/23/20 low as of 4/16/21 (Past 12 months)



Total Return Top 7 Stock Portf +113% SP500 +86%

Beating SP500 by 27% from 3/23/20 low




TOP 7 STOCK PORTFOLIO UPDATE



New Buys



New Sells

Sell Stops







BEST DIVIDEND ETFs - 1 YEAR PERFORMANCE


The #1 best performer for dividend etfs was Schwab High Dividend SCHD, now

up 88% in the past 12 months, with a 2.7% dividend. This ETF is highly concentrated

(the secret of its outperformance) with the Top 10 representing a whopping 46% of

the entire ETF. We own the Vanguard Dividend Cap Appreciation etf VIG in Top 3 Sector Portfolio, it's up 69%.


We also like the SDIV - Super Div Stock etf, up 71% with a 6.8% dividend.



Dividend ETF performance past 12 months:






Top 10 Holdings Schwab Dividend ETF - SCHD:






CNBC Fast Money's Josh Brown: the power of compounded interest


How many years will it take to double your money?


Take the annual rate of return and divide it by 72, which gives you how many years

It will take to double your money:


5% return (72/5) = 14 yrs

7% return = 10.3 years

9% return = 8 yrs

11% return = 6.5 yrs


13% return = 5.5 yrs

15% return = 4.8 yrs

17% return = 4.2 yrs


So by increasing your return from 7% a year to 11%, the 'years till double'

falls from 10.3 years to 6.5 years. In two decades, that's 13 years versus 20.

Adds up doesn't it?


With a 14% yearly average return, you would double your money in 5 years, and 35% a year doubles it in only 2 years.




KEY STOCK INDEXES SP500, Nasdaq, Russell 2000



SP500 - SPY Chart: Up 87% from 3/23/20 low. New high today

at 417.26:






NASDAQ 100 - QQQ Chart: Rising 102% since March lows, corrected 11.5% to 150 DMA, then a 14% pop:






RUSSELL 2000 SMALL CAP INDEX - IWM


Rising 134% from the March low, consolidating at 50 DMA now.










TOP 3 SECTOR PORTFOLIO - HISTORIC PERFORMANCE

Updated 4/13/21


Let's look at 3 time periods for performance of our Top 3 Sector Portfolio.

Each period begins with a significant low in the market, so that it's a level playing field.


The first is short term - 12 months since 3/23/20 pandemic low. Second is

the past 2 years, and the 3rd time period is the previous 4 years.


Note how ARKK, QLD, IGV, SOCL, FDN and XBI stayed consistently in the Top 6-7 for

every time period. Robotics etf BOTZ also had very strong returns.



Short Term -Last 12 months - 3/23/20 to 4/13/21

Total Return: +203%

# 1 ARKK +251% SP500 +83%





Last 2 Years - 1/4/19 to 4/13/21


Total Return: +228%

#1 QLD +344% SP500 +71%






Last 4 Years - 1/3/17 low to 4/13/21


Total Return: +244%

#1 ARKK +511% SP500 +98%






LONG TERM TOP 3 SECTOR PORTFOLIO PERFORMANCE - 2 YEAR RETURN


Here's how the Top 3 Sector portfolio has performed longer term

from the 12/24/18 low, a little over 2 years:




Total Return Top 3 Sector Portf: +224% SP500 +71%

From 12/24/18 low beating SP500 by 153% past 2 yrs



TOP 7 STOCK PORTFOLIO - 2 YEAR RETURN

From 12/24/18 low (Past 2.25 yrs)



Total Return Top 7 Stock Portf +124% SP500 +71%

From 12/24/18 low beating SP500 by 53% past 2 years








Top 3 Sector Portfolio Strategy

Our investment strategy is unique. In the Top 3 Sector Portfolio, we invest solely in ETFs, both long and short, with an emphasis on Sectors, as they always outperform indexes.


We will also use 2x ETFs, focusing on 6 key indexes only (SSO, QLD, UWM, TWM, QID, SDS) as warranted by market conditions. We do not short sectors.


In addition to the "Top 3 Sector ETF Portfolio," we also feature an all-stock portfolio entitled "Top 7 Stock Portfolio," utilizing the same criteria for selection of stocks as the Top 3 Sector ETF Portfolio.



WHAT DOES "TOP 3 SECTOR" MEAN?


The term 'Top 3 Sector Portfolio' comes from a phenomenon we call the

"Top 3 Effect," where the top 3 sectors that emerge first from a pivot low, tend to outperform for longer time frames in the future.

After a flush out low, the best ETFs will continue to outperform 3, 6 and 12 months later.​


Here's an example of this effect:​


The first time period is from the 12/24/18 Christmas Eve market bottom to 4/12/21, a

little more than 2 years.


The second period is the last 12 months from the much discussed Covid 19 3/23/20 low to today, 4/12/21. The 3rd period is the last 4 years from January 2017 to today.


Table 1


Past 2 .2 years from 12/24/28 to 4/13/21:




Table 2


12 months from 3/23/20 to 4/13/21:






Table 3


Last 4 years (Jan 2017 - 4/13/21)






Let's look at the first Table 1 - 2 years (from 12/24/18 to 4/13/21):


Best 3 ETFs past 2 years:


#1 QLD (2x QQQ) +348%

#2 ARKK +249%

#3 SOCL Social Media +164%



When you look at Table 2 - 1 year (3/23/20 to 4/13/21) we see:​

Best 3 ETFs past year:

#1 ARKK +254%

#2 QLD +262%

#3 SOCL +178%



And over the last 4 years, it's also the same 3:


Best 3 ETFs past 4 years (Jan 2017 - 4/13/21)


#1 ARKK +511%

#2 QLD +468%

#3 SOCL +232%




Note the QLD, ARKK and SOCL are in the Top 3 for all 3 time frames.

Point being, that the Top 3 that emerged from the 12/24/18 low continued that out- performance in the shorter, most recent time frame (past 12 months). And when

we look at a longer time frame - the last 4 years - it's the same three ETFs.


Another key secret to our success, is allocating more capital to the Top 3 ETFs - concentrating resources in the best performing assets which greatly improves our returns. Currently the Top 3 ETFs get 57% of the portfolio. This is an important aspect of our 'Top 3' strategy.​


The top 3-6 will vary a bit, but the first ones off that flush-out low, tend to be the ones still on top 6 months later, 12 months later, etc.​


We have observed this effect over the course of nearly 23 years of trading, giving more credence to the power of the "Top 3 Sector Strategy."


This momentum strategy has been documented by two recent research studies, where stocks that outperformed by a wide margin over a 5 month and 12 month period also delivered a much greater gain longer term. The MTUM Momentum ETF follows a similar strategy.


Here are 3 links to the research done on 3, 6 and 12 month momentum studies:


https://alphaarchitect.com/2016/10/14/how-to-measure-momentum/

https://seekingalpha.com/article/4240540-optimal-lookback-period-for-momentum-strategies

https://www.anderson.ucla.edu/faculty-and-research/anderson-review/momentum



SHORT OR LONG - WE TAKE ADVANTAGE OF THE TREND

The beauty of this strategy is that we make money in both Bull and Bear markets, as we can switch to short ETFs when a positive trend is ending, whereas nearly all mutual funds are long only - giving them a definite disadvantage when markets decline.


SECTORS OUTPERFORM

Since Sectors always outperform indexes, we have a larger portfolio allocation to this area (63%).

For instance, as seen above in Table 2 (from the 3/23/20 low), ARKK is up 254%,

SOCL Soc Media is up 178%, while the SP500 is up 83%.


Yes, sectors always outperform indexes. When you note that 92% of all managed funds have not beaten the SP500 index in the last 15 years, it's even more impressive.

In normal market conditions, we allocate as follows:

2 Index ETFs (QLD and IVW)

5 Sector ETFs (This may vary between 4-6 due to mkt conditions)

2 Dividend Stock ETFs (only VIG currently)

2 International ETFs (Currently none,but when appropriate, we use IEMG & EZU)

As of 8/24/20, our portfolio allocation is:

Index: 32%

Sector: 63%

Dividend Stock: 5% ​

International: 0%​

This portfolio strategy is aggressive, and is recommended for experienced investors, especially since we employ the 2x ETFs, as well as Inverse ETFs. We are not invested in any bond funds currently due to rising interest rates. The TLT is

down 17% in the past 12 months as of 4/9/21.

THE POWER OF DIVIDENDS

Dividend Yield ETFs are also critical to outperforming the benchmarks.

Investors today are desperate for yield.


We utilize domestic and international dividend stock ETFs (although presently we are in domestic only).


Currently we have VIG for our Dividend Yield allocation. VIG - Dividend Appreciation etf is up 34% the past 3 months, with a dividend of 1.6%.


Dividends are taxed at only 15%, (for those with incomes less than $250,000/year). Interest income would be taxed at 22% to 24% in the same earning bracket.

The power of re-invested dividends for total return is simply amazing.

In the last 20 years, from March 3, 2001 to March 26, 2021, the SP500 is up 234%. Pretty good return.


But wait, add in dividends reinvested, and that SP500 return rises to

+375%, nearly double!

Dividends should ALWAYS be reinvested. Always.



Here's a list of Dividend Stock ETFs, as well as some Domestic and international bond funds that measures performance from the 3/23/20 low to 4/11/21 - one year.


#1 in our list is Schwab Dividend Equity etf SCHD up 88% with a 2.7% dividend.

Our VIG we hold in Top 3 Sector Portfolio is up 69% with a 1.4% dividend.









NUALOLO VALLEY, KAUAI




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The information and material contained within the posts and articles appearing at this site are the opinions of the Authors alone and do not constitute a recommendation of any securities, investment strategy or investment transaction. The information and articles appearing at this site are not intended to be and should not be considered investment advice or a recommendation to any user regarding their personal investment needs or economic circumstances. None of the content provided is intended as investment advice regarding any specific security, portfolio of securities, market strategy or investment transaction.


Copyright 2016 Top3SectorPortfolio



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