Does the Growth Portfolio Use Stops?

In short, yes, the strategy uses stops. The exact stop is not disclosed but it utilises information from both the trend of the individual share and also the trend of the broader market. However, the stop is not placed in the market for a number of reasons; our research suggests that a stop based on the close is a better option; it makes the strategy easier to manage and lastly all clients will get the same execution price.

The original system was designed back in 1999 to trade futures. It was adjusted to trade equities in 2001. It’s important to also keep in mind what the system is designed to do, which is:

• Keep you on the right side of technically strong stocks
• Keep you on the right side of fundamentally strong stocks
• Reduce the volatility of a Buy and Hold portfolio
• Increase the risk/reward of a Buy & Hold portfolio by a significant amount
• Revert to cash during prolonged bearish periods
• Simplify the stock selection from a vast universe
• Allow the user to participate in the market knowing that the implemented strategy has shown an acceptable positive expectancy in the past
• Remove excess noise from the decision-making process

These factors make it an important and popular tool for people managing their retirement capital.