I created the SIF model portfolio in April 2016, almost eight years ago. Since then, managing this rules-based virtual portfolio has become a regular part of my weekly investing and writing process.
Throughout this period, Stockopedia has kindly allowed me to continue documenting the progress of this portfolio for subscribers.
While the returns generated by this strategy have been unspectacular by the standards of US tech stocks (or indeed those of many accomplished private investors), SIF has beaten the UK market by a decent margin and created enough value to keep me investing some of my own cash alongside the virtual portfolio documented here.
As the markets adjust to the new normal of higher interest rates, I’m keen to see if my rules-based system can continue to generate acceptable returns.
A cautious start to the year
The first quarter of 2024 was modestly positive for UK equity markets. Only the much-unloved AIM All-Share index has failed to make any progress so far this year:
While expectations for interest rate cuts have been pushed back somewhat, I think there’s a general consensus that rates have peaked and inflation is more or less under control.
Heading into this year, I was cautiously optimistic about the opportunities in 2024. Let’s see how things have panned out so far.
SIF Q1 2024 performance review
The stocks I add to the SIF portfolio are selected from a stock-buying screen and then subjected to a limited additional analysis. This is done to ensure a basic level of diversification and to avoid stocks I view as outliers or special situations.
(In a recent academy article, I wrote about screening and the benefits it can provide)
My SIF screening rules are designed to identify affordable, profitable and growing companies. Broadly speaking, this is a GARP approach, with an emphasis on value and momentum.
I review the screen results weekly and add one stock each week when suitable choices are available, although this isn’t always the case. For example, I added six new stocks in Q1, which I would say is fairly average.
The portfolio’s default holding period is nine months, after which each stock must continue to pass additional screening tests in order to remain in the…
