The first quarter of 2015 proved to be a disappointing quarter for both the Internet and the Perfect ETF portfolios, this was in sharp contrast to the World Cup portfolio that produced gains of over 20% for the quarter.
Q1 was largely sloppy and a trendless quarter for both of the Internet and the Perfect ETF Portfolio which explains the disappointing returns.
The Perfect ETF Portfolio
This portfolio is designed for 401 and IRA retirement accounts that can only to go long in stocks. Here are the 5 ETF's the portfolio tracks and trades in this portfolio. They are the ETF’s, GLD, USL, SPY, and FXE. You cannot go short in either a 401k or an IRA retirement account. The Perfect ETF Portfolio is designed to protect your nest egg from either a sharp drop in values or to protect you from rising values and inflation. In Q1, it did not trade two of the ETF's as our Trade Triangle technology was indicating that the ETF's, USO and FXE were in down trends. Q1 presented a difficult trading environment with no solid upward trends appearing for the quarter.
Here's how the quarter shaped up for the Perfect ETF Portfolio.
GLD -$2.55 on 100 shares
SPY -$6.71 on 60 shares
USO no trades
FXE no trades
Number of shares are determined by dividing $50,000 into four buckets of $12,500 and then dividing the share value into $12,500 to get the number of shares you will trade in and then rounding that number down.
A difficult trading environment and the fact that it did not trade 50% of this portfolio produced a net loss of 1.3% for the quarter. While it's not a profit, I think we can all agree that losing 1.3% of one's portfolio value over a three-month period is not the end of the world. Let's stay focused and disciplined and see how the second quarter works out.
The Internet Portfolio
The Internet portfolio did not fare well with one trade in particular causing a major loss. This portfolio tracks five internet stocks both from the long and short side, those stocks are as follows, FaceBook (FB), Netflix (NFLX) Yelp (YELP), Yahoo (YH00) and finally Amazon (AMZN).
Out of those five stocks, 2 had profits, Facebook, and Amazon. Those profits were not enough to offset what I consider to be a once in a blue moon event in Netflix. This "Black Swan" event completely caught many traders by surprise included the Trade Triangle technology. The loss in Netflix was close to 6% which I consider to be high given the fact this market reversed so quickly. Overall the portfolio suffered a net loss of 6.8% for the quarter. While not a positive return, it certainly is not a knockout for this portfolio and I expect to recoup all of that and then some as we proceed in the trading year.
FB +$0.66 on 125 shares
NFLX -$98.52 on 30 shares
YELP -$8.33 on 180 shares
YHOO -$2.06 on 190 shares
AMZN +$29.24 on 32 shares
Number of shares are determined by dividing $50,000 into five buckets of $10,000 and then dividing the share value into $10,000 to get the number of shares you will trade in and then rounding that number down.
World Cup Portfolio
All of this is in sharp contrast to the World Cup portfolio which produced profits of over 20% for the quarter. The key with any investments is to be diversified, and while you were diversified in both The Internet Portfolio and The Perfect ETF Portfolio it was not enough to avoid a negative quarter. I'm are looking forward to Q2 and positive results in all 3 of the model portfolios.
Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
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