The first half of the year and the last 12 months since July 1, 2023, have delivered great market results. Want to dive in, read our Q2 2024 Quarterly Market Review here.
The same is true of our model portfolios - good 6 month and 12 month results. Our goal for the stock portion of our model portfolios is to 1) Come close to S&P 500 with 2) Lower volatility. That is exactly where we are. With 25 1/2 years of data our Model 100 has a 7.9% annualized return with 15.6% volatility. The S&P 500 has a return of 8.0% and 18.6% volatility.
See our 2 page performance summaries for our standard model portfolios here and for our social model portfolios here.
We often rely on the S&P 500 as an index representing large cap US stocks. Unfortunately, the index has been allowed to become less diversified ( technology concentrated) similar to the NASDAQ index. In addition speculators have driven up (and driven down) prices of various groups of tech stocks, and they get new names as the makeup of these over-hyped stocks change. Remember how internet stocks were over-hyped in 2001 even with no profit, soared? Then reality came back and they crashed. In reality, the attention to these stocks were warranted, people just got too excited too soon. AI (artificial intelligence) might follow a similar pattern.
Though a small percentage of people get lucky and buy stocks such as these at the right time - and sell them before they inevitably drop - for the vast majority they get in too late and leave too late. Human emotions of fear and greed make this kind of extreme speculation very difficult and very stressful. If speculating is your approach, it is not a one-time process. You have to repeat it regularly over time as the news cycle and the hyped companies constantly change.