How to use a model portfolio

The Marcus Today Model Portfolios – Growth and Income – are the core of what we do. They are where all of our analysis (both fundamental and technical), reading, discussions, debate and decision-making are crystallised into actionable outcomes. They are how (along with Marcus’ Strategy articles) we pass messages about the market.

Quite simply, they are where the rubber meets the road.

Be sure to read the midday newsletter for Marcus’ Strategy and all portfolio commentary and changes. All portfolio updates and a current record of trades can be accessed here – Growth and Income.

Understandably they garner a lot of interest and are tracked closely by many of our members, whether it be to replicate the performance, provide a list of ideas, or give direction on the market more broadly.

Over the journey we’ve had many questions about the portfolios, many of them with common themes. Below is a selection of the most common Q’s and their answer, so that you may get the best out of the portfolios.

What is a model portfolio?

A model portfolio is a hypothetical portfolio that highlights the stocks that the MT Team feel are best suited to achieving the goals of the portfolio. For example, the MT Growth Portfolio is typically looking for high-growth stocks which typically do not pay high dividends – as all profits are reinvested into future growth. As such, a stock that is in the MT Growth Portfolio is less likely to find a place in the MT Income Portfolio, which is looking for strong companies that pay a sustainable dividend. Whilst the portfolios are hypothetical, they are performance tracked and all relevant information regarding the timing of buying and selling decisions is communicated through the newsletter.

How to use a model portfolio?

This is up to the individual. Some members attempt to replicate a portfolio exactly. Some members use them as a shopping list of opportunities. Sometimes it depends on the level of experience of the member, with newbies to the market more likely to follow the portfolios closely and more experienced investors making their own decisions. However they are used, what you can be sure of is that any stock in the portfolio has been researched and is endorsed by the MT Team.

Do I buy now?

A common question for anyone coming to the newsletter and the portfolios for the first time. In short answer, ‘yes’. If a portfolio exists in the newsletter then you are fine to go out and replicate that portfolio. It may be the case that you buy a number of stocks and then, in a short space of time, we decide to exit one or two of those stocks. This cannot be helped but it is very unlikely that there would be a situation where you buy all of the stocks in the portfolio and then we are advising you to sell the next day. We say unlikely because there have been times, during extreme market conditions, where we have sold down the portfolios aggressively and gone to cash. We will communicate our concern about the market via the newsletter however, predominantly in Marcus’ strategy articles, so you should know our thinking about the market in any event.

What do I look for?

Portfolio changes will be communicated via the newsletter, most likely during the lunchtime update. When adding stocks we will provide a summary of why we are buying. The changes will also be reflected in the portfolio pages, the links to which can be found in the right-hand side menu of the newsletter. It is important to pay attention to the weight that we are attributing to each stock. For example, we might suggest taking a 7% weighting in Commonwealth Bank (ASX: CBA), meaning that 7% of our entire portfolio will be committed to CBA.

For example, if you had a $100k portfolio your portfolio would have $7,000 worth of CBA.

How does it apply to me?

As mentioned above, the portfolios are the core of what we do. To get the most out of your subscription, we suggest paying attention to the activity in the portfolios. A lot of hard work goes into them and they are one of the best representations of the views of the Marcus Today team.

Ready to start using our model portfolios?

CLICK HERE to get started

Please be sure to read the detailed explanation for each of the model portfolios underneath their recent changes. They provide a synopsis of the purpose of each portfolio.

 

Happy Investing,

Chris Conway | Chief Operations Officer

MBA LLB BEc GradDipAppFin DipTA(ATAA) CFTe(IFTA)

 

If you have any more questions about how to get the most out of a Marcus Today subscription please email us info@marcustoday.com.au