Frequently Asked Questions

If this method is so effective, why doesn’t anyone use it?

Personally, I believe that this method is still little known today, but it is partially used within banks, alongside fundamental analysis and other investment criteria. Furthermore, a bank or an investment fund could not afford to invest 20% of its portfolio in a single stock because the risk would be too high, which excludes portfolios with the highest-performing 5 stocks. Additionally, a rebalancing for an individual involves transferring a few thousand or tens of thousands of euros, with no risk of moving the markets :-) In comparison, an investment fund can shift millions of euros, or more, from one stock to another, meaning the impact on the markets would be much more significant.
Finally, if we take the average gross return of this method, say 20% for a moderate risk, and subtract the bank's fees, taxes, employee salaries, etc., we end up with around 10% of final performance that the bank can offer to its clients, which is a value commonly observed in the market.
The idea here is simply to avoid as much as possible using banks or investment funds to optimize performance, at the cost of a little extra work each month, for a fixed price regardless of the amount invested.

"Success is the sum of small efforts, repeated day in and day out." (Robert Collier)

Why not use ETFs?

An ETF is, by definition, a basket made up of many stocks, both good and bad. Investing in an ETF means investing in both good and less good stocks, thus leading to lower returns and lower volatility.
This wasn't something that suited me, but I still tried playing with some ETFs (STOXX600, S&P500, Nasdaq, US Treasury Bonds) to see if I could get anything interesting, but without success compared to direct stock investments. So, I set this idea aside. It seems easier to invest in a fund like Warren Buffett's Berkshire Hathaway, and not bother with monthly rebalancing if you're looking for an investment solution with minimal effort.

Why a paid website?

I have spent the equivalent of several months working full-time to develop and optimize this algorithm, and I need to pay my bills like everyone else :-) I could have kept it to myself, but I preferred to make it available for a small fee compared to the charges made by banks, for interested individuals who want to use these portfolios in their investment decisions. This fee helps cover costs for access to stock market data and website hosting. I made sure to keep the website as functional and educational as possible, avoiding excessive marketing. This fee also ensures quality and service continuity, as each newsletter I send is built manually, based on the algorithm's data, after systematically verifying the results to avoid ending up with virtual gains from a takeover, for instance, with little potential for future growth.

When is the newsletter sent?

Generally, to avoid errors and unnecessary stress, I prepare the newsletter on the last day of the month by running the algorithm during the day. Then, I wait for the market close to run it again and check if there have been any changes in allocation (which is unlikely, as half-day variations are unlikely to have an impact). This gives me time to check each proposed stock individually to avoid issues like takeovers. So, you can expect to receive the newsletter around 10-11 PM (Paris time) due to the time difference with the US markets.

Why rebalancing at the end of the month and not more frequently?

My tests showed a significant difference between the last day and another day of the month (the performance varies by a few percent, but generally, the last day is almost always at the top of the list), so I stick to this configuration.
More frequent rebalancing, however, doesn't provide sufficient gains in terms of performance or volatility and would add additional costs, so I set that hypothesis aside.