Model Portfolio Explained

The model portfolio feature is based on the foundation principles of the Investor Signals methodology. The approach is based on over 25 years of market research and industry experience.

Winning trades tend to keep winning and losing trades tend to keep losing. Investors often don’t possess the discipline required to capture the big winners and cut the losers. Our Algo Engine addresses this problem and more than 10 years of testing show consistent outperformance relative to industry benchmarks.

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Here’s how it works: When a stock shifts from sell conditions into buy, (a reference to the primary red and green boxes), our Algo Engine adds the stock automatically to the relevant model portfolio. If the stock belongs to one or more of the indexes, it will be added to the relevant lists in the model portfolio tab.

To ensure you get notified of when a stock is added or removed from a model, ensure the envelope beside the list is green, not grey.

A new addition to the model can remain for months or years, or more specifically, until such time as the trend falters and the Algo Engine shifts to sell conditions. The removal or sell instruction will occur on the first sell signal.

It’s possible that a stock that has shifted from sell to a buy signal and has been added to the model will then have multiple subsequent buy signals as the uptrend develops. Investors may wish to add to their original position on each buy signal, however, we do recommend exiting 100% of the position on the first sell signal.

# Always ensure your position size is managed within the confinement of your overall risk strategy.

All our published testing assumes an equal weighting to each signal and no compounding of the position size on subsequent buy signals. We buy on the first buy signal and we sell on the first sell signal.

Using CSL as an example.

  1. Shows the last sell signal
  2. Shows the switch to the first buy signal, (meaning it’s added to the model portfolio)
  3. Shows the fist sell signal, (meaning it is removed or sold from the model portfolio).

All dividends are then accumulated and added to the performance of the overall holding. You will note in the CSL example that each retracement within the overall uptrend generated subsequent buy signals, (green boxes).

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