See TIPs Model Stock Portfolio Tracker in action!

The TIPs Model Stock Portfolio Tracker contains stocks that we have selected to show how the TIPs Methodology can out-perform the overall stock market and help identify the best stocks to buy.

The Tips Model Stock Portfolio Historical Backtest

Introduction:

Construction of the multicap stock portfolio utilizes the full capabilities of the TIPs 1500 stock universe valuation and forecast data. State of the art portfolio management rules, including sell and replace disciplines, are integrated with 50 stocks ranked in the upper quintile for performance vs. the S&P 500.

By definition, multicap means indiscriminate as to style or sector; for example, large cap growth, small cap value and other styles and industry sectors become attractive and unattractive based on valuation and a forecast of performance. Once stocks have qualified for inclusion in the database, there are no style or sector limiting parameters for inclusion in the portfolio.

The result is a continuously managed 50 stock portfolio, with the goal of outperforming the S&P 500 stock index.

Portfolio Construction

The original TIPs database was created in 1991 by Robert J. Stalla, PhD, CFA, and John C. Webb. The portfolio was constructed and tested by John C. Webb, Ralph D. Gibson, CFA, and Dale Holiday, September, 2003-March, 2004. Important characteristics include:

• No survivorship bias; i.e. all data are historical. Stock history for merged companies, bankrupt issues, and all other adjustments are reflected as historical data.
• No data snooping, i.e. no retroactive selectivity of companies or industries based on modeling theory. A sound economic theory underlies the testing of large amounts of data from the beginning.
• Our test and construction began with 12/25/98 data, creating a 50 stock portfolio of equal weighted investments.
• During the following 12-month period, replace and rebalance rules were implemented that could be replicated. That is, no subjective input was required once the rules were in place.

Performance

Results by quarter vs. the S&P 500 are summarized below. Using the fundamental valuation and quantitative ranking and forecasting methodology, the results are compelling; The TIPs database and algorithms provide an objective, compelling basis for portfolio research, construction, and management.

Click here for TIPs Historical Results                     

Click here to see the current TIPs Model Portfolio and year to date performance.

Please Contact Us for further information.