The Investment Grade Value Stock Index - Continued

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History of the Investment Grade Value Stock Index

The IGVSI was developed in December of 2007 to provide a benchmark for the Equity portion of MCIM portfolios managed using Working Capital Model (WCM) disciplines. For more than ten years, Investment Grade Value Stock investors had been frustrated by the inadequacies of the DJIA and the NYSE indices. During that period. NYSE Issue Breadth and New High vs. New Low Statistics moved in different directions than the averages, nearly all of the time.

Since 2005, the popularity of Closed End Funds (particularly the index variety) has altered the statistical playing field, making NYSE "market stats" nearly worthless in monitoring the behavior of Investment Grade Value stocks. There are fewer than 400 IGV stocks, yet the NYSE "issue breadth" numbers report trading of over 3,000 issues per day. Similarly, the "most advanced" and "most declined" lists contain an ever increasing number of indexed derivatives, making it difficult for IGVS investors to zoom in on their area of interest.

Hoping to answer the now ludicrous question: "whatever happened to stocks and bonds?", several old school diagnostics are presented here. The IGVSI chart tracks the most fundamentally sound companies on the planet. The IGVSI "Bargain Stock Monitor" analyzes the price levels of the index components to help you navigate the investment cycle for better decision making. IGVSI Issue Breadth and 52-week "High vs. Low" numbers help to complete the equity environment trend picture, and the "Expectation Analyzer" discussion will help you fine-tune your portfolio performance expectations.

Two other indices, the Working Capital Model Select Income (WCMSI) and the Working Capital Model Select Municipals (WCMSM) report on the movement of managed closed-end income funds of the type contained in Market Cycle Investment Management portfolios. They should help you fine tune your performance expectations about the income bucket of your portfolio.

All of these important numbers are presented for your use right here, but what you do with them is totally up to you.

Most investors misuse, even abuse, the statistics they have contact with. Perhaps the best example is fanatical worship of the DJIA (up less than 19% in 2009) as a performance monitor for all purposes, and all portfolios. Statistics are historical data, and none can actually predict anything. What they are best used for is to formulate performance expectations --- a skill that must be mastered for long-term investment success.

The IGVSI is a new index, but one that is becoming an accepted benchmark for assessing the performance of the "Equity Bucket" of MCIM-WCM investment portfolios.

The income portion of a portfolio demands separate attention, and a pretty much blind focus on income. Click here for a helpful article on that subject, or study Chapter Five of The Brainwashing of the American Investor "What Your Mother Never Told You About Income Investing". The WCMSI is presented with the IGVSI to give you a feel for what is going on in the income portion of your investment portfolio --- the WCMSM examines a sampling of closed-end Municipal Bond funds.

NOTE: Average performance of IGVSI, WMCSI, & WCMSM: 12/31/08 to 12/31/09 = 34.3% vs. DJIA + S& P = 21.5%


 
Market Cycle Investment Management
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Please read this disclaimer:
Steve Selengut is registered as an investment adviser representative. His assessments and opinions are purely his own. None of the information presented here should be construed as an endorsement of any business entity; the information is only intended to be educational and thought provoking.


The Working Capital Model - Market Cycle Investment Management - FREE Mentoring Program

Professional Investor/Manager Steve Selengut, and an experienced panel of experts, walk you through the Market Cycle Investment Management (MCIM) portfolio management process. We'll hold your hand, answer your questions, and do everything we can short of security selection as you learn how to run your own (or your client's) portfolio.

The Mentoring Program is FREE, and includes:

  • The "Road To Success" Investment Training Program (minimum of 3 sessions)
  • The "Performance Investors Want & How to Get It" program (if applicable) 
  • The "Market Cycle Investment Management" program

The mentoring program is no longer private --- at least six people (all "Brainwashing" book owners) must attend each meeting.

Note:  Headsets will make the experience much more productive.

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Associated Content:
October Market Stats Offer Mixed Directional Messages - What happens in the future is unpredictable, but understanding the past and how it impacts your uniq...
Market Prices Rebound While New 52-Week Low #'s Continue To Rise - The New High and New Low issue stats can identify weaker and/or stronger sectors within the Investme...
Stock Market Rebounds - 4th Quarter Starting Strong - IGVSI breadth statistics signal changes in direction within Investment Grade Value Stocks only --- a...
Bargain Stock #'s Steady... Similar To 1999 Bubble Stats - The fewer IGVSI equities at bargain prices, the stronger the market and the more Smart Cash that sho...
IGVSI Performance Whups S & P 500... Seven Years and Counting - The IGVSI is a barometer of a small but elite sector of the stock market called Investment Grade Val...
Modern Portfolio Theory --- The Root Of All Evil - Clearly, the MPT creators were once Mutual Fund investors, looking for something better after years ...
Investment Performance Expectations and Broker Account Statements - Whether you go the discount route through Schwab, Ameritrade, Fidelity, etc., or enjoy a higher leve...
Harnessing Stock Market Volatility - On the bright side, enhanced market volatility enhances the power of the equity and income security ...
Investment Grade Value Stocks: August Market Statistics - The S & P 500 began to achieve new All Time Highs in March 2013 --- impressed? The IGVSI started a r...
Investment Performance Expectations: MCIM Portfolio Fine Tuning - How can I get you to stop fixating on monthly market values and to focus on the purpose of the secur...

Please read this disclaimer:
Steve Selengut is registered as an investment advisor representative. His assessments and opinions are purely his own and do not represent the views of any other entity. None of his commentary is or should be considered either investment advice or a solicitation of business. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be or should be construed as an endorsement of any entity or organization. The reader should not assume that any strategies, or investments mentioned are any more than illustrations --- they are never recommendations, and others will most certainly disagree with the thoughts presented in the article.