REVIEW OF PERFORMANCE OF SHARE RECOMMENDATIONS IN 2023
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22nd December 2023
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The change from a bearish stance to a bullish one in early February, based on technical analysis of the S & P 500 chart, proved to be the highlight of the year for SEXTON READS THE CHARTS. It was up, up and away after that on the equity markets, particularly on the US stock market, which tends to lead all other markets.
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A change in trend does make life a little more difficult, however, as regards the management of the individual stocks in a portfolio. Stocks that are selected using chart analysis when the overall market is bearish, will tend to underperform if the overall trend subsequently turns bullish, as has happened in the year gone by.
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Some changes were therefore made to our recommendations during the year, particularly for the Euro Stoxx 50 shares, where there was an addition of two new stocks in April, and also for the US stocks where a rejig was done in June. These changes reflected the fact that the market had turned bullish, per our chart indicators in February.
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Note also, that when a stock is deemed to have a bullish outlook per SEXTON READS THE CHARTS, a key level for the share price at which the outlook would change, is also given. For example, when Anglo American shares were deemed to have a bullish outlook on 30th January 2023, when the share price was standing at £35.57, it was also stated that a fall below £29 would provide evidence of a breakdown of the upward trend.
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In this case, the stock did indeed fall below the £29 warning level, but I have not accounted for a 'sale' of this stock until the recent write up of an article on FTSE 100 stocks, and the stock was trading at £19.30 by that stage. Therefore the assessment of the performance is quite conservative, compared to the results a reader would achieve if they diligently followed the action suggested whenever a recommended stock breached a key level.
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Despite using this more conservative way of analysing performance, our FTSE 100 share recommendations still outperformed the index, showing an average gain per stock of 4.4% versus a gain of 3% for the FTSE 100.
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The change in the overall market trend during the year did hurt the performance of our Irish share recommendations, however, which had an average gain of 11.7% versus a gain of 22.5% for the ISEQ.
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As regards the Euro Stoxx 50 and the US stocks, it was the proverbial game of two halfs!
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Our European stock recommendations underperformed in the first half of the year, realising an average gain of 4.2% versus a gain of 15.5% for the index. The addition of two new stocks, to reflect the change of overall trend in the market, in April 2023, did have the effect of our selections marginally outperformimg for the remainder of the year, realising an average gain of 3.1% versus again of 3% on the index.
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The reverse occurred for our US stock recommendations. Despite the fact that they were selected when the market trend was deemed to be bearish, they still outperformed the market by showing an average gain of 4.5%, versus a gain of 3.4% on the Dow Jone Industrials index for the period to June 2023,at which point some changes in recommendations were made.
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In the second half of the year, our US stock recommendations underperformed the market, showing an average gain of 1.5% versus the gain of 9.75% in the same period for the Dow Jones Industrials index. However, one would need to give the new recommendations at least a year before the true performance can be assessed, particularily if their charts remain bullish.
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A detailed breakdown of the performance of all share recommendations, together with an updated recommendation for each one, can be found here:- CLICK HERE.