Holding V&M’s Stock of the Week for Longer than a Week
This is my last bit of geekery re: the VIX & More Stock of the Week portfolio.
In my first post I showed the performance of following the SOTW using a simple “buy at Monday’s open, sell at Friday’s close” approach, and in my second post I tested an approach to reducing market risk (beta) in the SOTW portfolio with an ETF hedge.
The logical next question is how does the SOTW perform if held longer than a week?
The graph above shows the average (dark blue) and median (light blue) weekly return of the SOTW in the 10 weeks after being published in the VIX & More newsletter.
The first week is from Monday’s open to Friday’s close and subsequent weeks are from Friday’s close to Friday’s close (because the investor already owns the stock). Results do not account for transaction costs or slippage.
From this view, V&M’s pick really is the stock of the week. Returns fall sharply after week 1. The next graph looks at the same data in terms of weekly win %.
More or less the same story.
As we’ve shown previously, V&M’s Stock of the Week has performed very well since inception when traded as suggested. We’re dealing with a smallish number of trades here (n = 107), but based on the data available, beyond the first week, returns for the SOTW drop off precipitously.
[click for a summary of all recent posts about the VIX & More SOTW]
Geek note: I had difficulty retrieving historical data for 1 of the 107 trades (ticker: CGRB), but based on the data I do have, this trade wasn’t a big mover and wouldn’t materially impact results here.
P.S. I’m not compensated in any way for these posts – I’m just trying to shine the light on the good guys.
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