It’s been another good month for Plan 5. Here are the September results for Plan 5 Monthly:
Plan 5 Monthly: September 2013 Results
|Sept 3 Open||Sept 30 Close||% Change|
|Boston Beer Co. (SAM)||216.08||244.21||+13.02%|
|Tesla Motors (TSLA)||173.40||193.37||+11.52%|
|Plan 5 Monthly: September 2013||+8.16%|
This month saw growth for all five of the September picks. The total portfolio gain of 8.16% edges out last month’s results and again easily beats the S&P 500’s gain of 2.79% over the same period.
It’s rarely a good idea to fix what isn’t broken, so there will again be very little change going into October’s list of Plan 5 Monthly picks:
Plan 5 Monthly: October 2013 Picks
Now, if you’re following Plan 5 Monthly, it’s time to rebalance your portfolio. Before you buy or sell anything, start by adding up the values of all five of your holdings. Divide the result by five to determine the target amount of money you should have invested in each of the new month’s picks. Next, sell your excess shares: for those picks that have carried over from last month (of which there are four this time around), sell however many shares you need to sell to get your total holdings in these stocks as close as possible to the target value you just figured out. One pick, Boston Beer Co., didn’t carry over — so you’ll want to sell your full investment in that company. Finally, using the proceeds from these sales, you’ll want to buy enough shares to bring your investment in each of the October picks as close as possible to the target value. For the new pick, Sierra Wireless, this means buying the full target value. For picks that have carried over, you may need to buy a few shares of some of them. You won’t be able to hit the target value exactly for any of the picks, and that’s okay. Just get about as close as you can given the share prices.
The result is that you should be making six trades. You will be selling all of Boston Beer Co. (SAM) because it is not carrying over. You’ll be buying the full target value of Sierra Wireless (SWIR) because it’s a new pick for October. The four other picks all carry over from last month, so you’ll just be buying or selling enough of each to get the value of those holdings close to your target value.
If you’re not confident that you understand how to do this, it might help to go through the process in a bit more detail. You can review how Plan 5 works, here.
That’s all for Plan 5 Monthly this month. Now let’s take a peek at how Plan 5 Quarterly is doing. If you’re following Plan 5 Quarterly, just sit tight — there’s nothing to do this month. (It’ll be your turn next time!)
Plan 5 Quarterly: September 2013 Progress Report
|Aug 1 Open||Sept 30 Close||% Change|
|Tesla Motors (TSLA)||134.32||193.37||+43.96%|
|WisdomTree Investments (WETF)||13.13||11.60||-11.65%|
|Plan 5 Quarterly: Aug-Sept 2013||+22.96%|
Plan 5 Quarterly had another great month, having grown 22.96% so far this quarter, with one month to go.
October may turn out to be a rough month for the market. Assuming no last minute deal, the U.S. government will be shutting down, maybe for a few weeks. The temptation is there to get out of the market now and jump back in only once the chaos has blown over. I would recommend staying in, though; riding out the downs and ups is historically a more successful (and much less stressful) strategy than attempting to time the market. If you pull out now and try to get back in at just the right time, you’re competing against many (highly skilled and experienced) money managers who are also trying to find the right timing. Unless you’re exceptionally gifted (or lucky), you’re liable to end up being in for the better part of the fall, and missing out on the best of the recovery. I’d say it’s better to avoid the risk, and the stress, by simply riding out the whole mess. Stick with the plan.
That’s it for this month — I’ll be back at the end of October with the latest picks.