Every year, at the latest by January, the question arises as to how to position a securities portfolio for the coming year. Whoever lacks the time to sift through and analyse the business models and balance sheets of hundreds of individual companies can make a preliminary selection with simple screenings.
But: now – we might ask ourselves – would it be best to choose the cheapest or the most expensive stocks – or are momentum approaches based on historical price changes better than ratio-based models?
With screenings, too, the many investment approaches soon lead normal investors to lose a sense of overview. Furthermore, many models look interesting and promising at first glance, but often lack meaningful historical performance data. Or is everything just a matter of chance, and you might make just as much money applying the „monkey strategy“ – in other words, employing a monkey to randomly select ten stocks.
We have tested various investment approaches for their performance over the past 15 years and present our current selection for 2018. For this, we created portfolios based on the respective criteria and back-tested them. In each case, we simulated equally weighted investments in 10 HDAX shares, and back-tested a portfolio realignment as of 1 January.
The good news is that screenings delivered significant outperformance. A ratios-mix, dividend strategies, and a momentum approach proved very successful in our study.
Nevertheless, investors should not blindly trust the statistics. Although Steinhoff is currently number one among all dividend stocks, the share price recently crashed due to alleged accounting fraud.