The point here and in the book, DIY Portfolio Management, is that individual investors can find strategies that 'beat the market.' The performance results below are offered as proof that 'do it yourself' investors can 'beat the market' not proof that these are good strategies. The hope is that individual investors will be inspired to come up with their own market beating strategies. The particular strategies tracked here may or may not work in the future. These strategies are based on prices cycling from cheap through correctly priced to expensive, back and forth. The idea is to buy low and sell high, not buy high and sell higher.
Trend Regression Portfolio Strategy
FOLIOfn Accounts performance from inception.
I use the strategies of DIY Portfolio Management to manage my own accounts at FOLIOfn.
......................................................................................................returns thru 12/31/2008
| Fund | RETURNS | Fund |
Years from | Annualized B(W) |
||
| Symbol | Inception | S&P500 | Fund | S&P500 | Inception | S&P 500 |
| DMTa | 3/26/2001 | -10% | 2% | 11% | 7.8 |
1.5% |
| DMTb | 3/26/2001 | -10% | -10% | 0% | 7.8 |
0% |
| ETFs | 5/13/2003 | 7% | 10% | 3% | 5.6 |
1.0% |
| Indexing | 6/11/2002 | 1% | 14% | 13% | 6.6 |
2.0% |
| DMTc | 4/1/2001 | 27% | -3% | -30% | 7.8 |
-3.9% |
| STECHa | 10/4/2002 | 27% | 376% | 349% | 6.2 |
24.5% |
| r2dp | 3/4/2005 | -17% | -9% | -8% | 3.8 |
2.2% |
As of 12/31/08, four accounts are up and all but one has tied or beat-the-market since inception. The first three accounts are funded accounts. The others are paper trading accounts with INDEXING as a control. INDEXING is rebalanced weekly to keep equal weighting in 3 domestic exchange traded index funds (ETFs) and 2 international ETFs (DIA, SPY, QQQQ, EFA, EWJ).
Symbol assignments reflect similarities between investment strategy and tie to portfolio strategies at Marketocracy also. The newest strategy, r2dp, is based on a regression, dividend, peg screen, and performance hasn't warranted funding.
The funded accounts are doing better than the paper accounts. The funded accounts usually have some cash. The paper accounts never have any cash (always 100% in equities) and have investment concentrated in just a few positions.
Five of Nine Marketocracy Accounts
Beat the Market
Returns to 12/31/2008 from inception:
| Fund | RETURNS | Fund |
Years from | Annualized B(W) |
||
| Symbol | Inception | S&P500 | Fund | S&P500 | Inception | S&P 500 |
| AG1 | 8/6/2001 | -14% | 2% | 15% | 7.4 |
2.1% |
| LONGF | 6/10/2003 | 2% | -25% | -28% | 5.6 |
-5.0% |
| STech | 9/30/2002 | 25% | -14% | -39% | 6.3 |
-6.2% |
| dmtpr | 6/22/2002 | 3% | -7% | -11% | 6.5 |
-1.6% |
| dmthi | 10/2/2001 | -2% | 18% | 20% | 7.3 |
2.7% |
| HILO | 8/8/2001 | -12% | -1% | -12% | 7.4 |
1.6% |
| r2dp a | 8/30/2001 | -8% | -34% | -26% | 7.3 |
-3.5% |
| T50 | 6/11/2005 | -19% | 22% | 41% | 3.6 |
11.5% |
| t500 | 2/9/2005 | -18% | 77% | 95% | 3.9 |
20.8% |
Fund trades are determined with a Trend Regression Portfolio Strategy from DIY Portfolio Management and funds are managed to conform with SEC mutual fund rules.
- Fund must have less than 35% in cash.
- 50% of fund must be in equities each less than 5% of total fund equity.
- No equity can be more than 25% of total fund equity.
- Negative cash balance can never exceed 5% of fund's total asset value.
The newest accounts, T5 and t500, are short accounts and have done well over the last year.
These performance results show it is possible to 'beat the market.' It is not a slam dunk, and some portfolios lose to the market.
Individuals can manage their portfolio to 'beat the market' but it takes work. The book goes through the process of building and testing a market beating strategy.
There is a significant difference between the performance of FOLIOfn accounts and Marketocracy accounts. FOLIOfn accounts don't need to comply with SEC mutual fund rules and FOLIOfn is more efficient for DIY Portfolio Management derived portfolios. Broker, or implementation, make a difference.