How You Could Have Performed With I Know First: Equal Weights Strategy

I Know First’s algorithm is a powerful tool for investors of any type. However, not all investors have the same amount of time, skill, or experience required to constantly manage their own portfolio. In fact, one of the most popular strategies that I Know First’s clients employ is to buy equal weights of all top ten stocks from I Know First’s Top Ten Stock package (our most popular item). One major advantage of this strategy is that the investor does not need to analyze or compare the signals or predictability for the stocks in the Top Ten as this can be an intimidating task for those new to I Know First. Rather, the investor chooses all of the top ten picks.

For example, a client might open their email with the forecast and decide that he/she wants to simply buy ten stocks and wait for a year. He would consult the 1 year time horizon (each of the 6 time horizons has a different prediction table), and invest equal weights  in each of the ten stocks. The graph below illustrates the return this client would have had if the above strategy was followed compared with the performance of the S&P 500 over the same time period. Considering that there is a new forecast each day, the portfolio of an investor following this strategy would change depending on which day it was implemented. Therefore, the Top Ten portfolio (one year time horizon) from the first day of the first six months of 2013 are shown below.

Understanding a 365 Day I Know First Top Ten Portfolio

Listed below are the specific forecasts from the dates above. In each image, you can see the prediction from the first day of the month (on the right), and the actual stock performance for the year displayed in the table on the right. For example, let’s consider the January portfolio. A subscriber would open his/her email on January 1st and consult the forecast for the Top Ten Stocks. Each of the time horizons has a unique prediction table, and the one shown on the left below is the prediction table for the one year time horizon.

Note that the prediction table usually includes a stock ticker in every box, but for the purpose of this post, only the tickers of the top ten stocks have been included. The two numbers in each box, the signal and predictability, are used by the algorithm to assemble the top ten list. On January 1st 2013, I Know First’s predictive algorithm chose the ten stocks listed below as the stocks as the best investments for the next 365 days. So, the subscriber would purchase equal weights of each of the ten stocks and hold them until January 1st 2014. Over this time period, the subscriber would have had an overall return of 48.46% return compared with the S&P 500’s return of 29.60%.