SmallCap Growth Trend
Hold positions in the fastest growing smallcap stocks with huge potential
Strategy Description
Our SmallCap Growth Trend strategy invests in stocks that have the most potential for price appreciation over the next 1-2 years. These are stocks with a market capitalization between $300 million and $5 billion dollars that have fast growing businesses with potential to achieve more in a large addressable market. The strategy always holds 25 positions long and uses our unique trend following overlay to determine when to exit positions. A little bit of leverage is used with 125% of the current account value invested. The goal is to expose the portfolio to stocks that have the potential to deliver 10x returns, that is 1,000% or more returns in under 2 years.
Strategy Objective
Benchmark: S&P 500 Index
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To deliver higher returns than the benchmark on a yearly basis and significantly so in the long term with a similar level of volatility and a moderate level of correlation.
Investable Universe
All stocks on US exchanges with a market capitalization between $300 million and $5 billion dollars that have at least $1 million in average daily traded volume.
Investment Approach
Our portfolio is always invested in 25 positions across at least a dozen industries, we use a combination of quantitative and qualitative analysis to identify the best investments to make. Our algorithm looks for stocks with strong business growth and an up-trending stock price. We then research the business within the context of its industry to ensure we're only investing in high quality businesses that have momentum in sales with potential to achieve a lot more. If we don't think the stock has the potential to deliver 10x returns in under 2 year's we don't invest in it.
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Our unique trend following algorithm keeps us invested in the stock provided there is a strong and healthy uptrend in the stock price. Once the price eventually breaks the uptrend as determined by our algorithm, the portfolio will then exit the position and replace it with the next best one we find.
Position Sizing
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The model portfolio puts 5% of the current account value into every new position
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There are always 25 positions open
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Total leverage used is 125%
Trade Frequency
Positions last on average from several weeks to several years and up to a year or longer if a good uptrend develops, the system will ride the trend for as long as possible.
Key Benefits
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Invest in the exciting SmallCap growth space with young companies that have new technologies
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Hold a portfolio of only up-trending stocks and never hold down-trending stocks
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Have the potential to achieve 1,000% returns in under 2 years on some stocks
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Low maintenance with only several trades per month in the last hour of the trading day
Strategy Performance
Below is the current performance of the SmallCap Growth Trend strategy of a hypothetical $30,000 portfolio following this strategy versus the S&P 500 Index as shown on the chart. The real time performance is tracked by independent 3rd party platform, Collective2 (C2) which includes all brokerage and our subscription fees. All of our trades are entered in real time into the C2 platform and can be publicly verified by anybody.
Cost to Follow
The cost to follow SmallCap Growth Trend is $60/month to receive all trade alerts to your email so you can manually enter the trades into your own trading account.
How to Follow the SmallCap Growth Trend Strategy
SmallCap Growth Trend is listed on Collective2, a copy trading platform that allows strategy developers to offer strategies for subscribers to follow and copy in real time. Think of Collective2 like an online trading strategy marketplace that anybody can join to find trading strategies to copy.
Follow the steps below to subscribe to the SmallCap Growth Trend strategy.
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Visit the SmallCap Growth Trend strategy page on Collective2 here https://collective2.com/details/142865658 and signup for $60/month
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Collective2 will now email you all changes to our portfolio in real time and you'll be shown what our current positions are. All trades are done in the last hour of the market day and some months there's no trades, other months there may be several trades.
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If you wish to have the trades automatically placed in your Interactive Brokers account then you have the option to sign up for an Auto-trade plan for an additional $49/month with Collective2 who will then automatically place all our trades in your IB account in real time.
After you sign up to our strategy on Collective2, you'll also be added to our members email list and immediately receive details on what current positions our portfolio holds. We also send out a monthly performance report to our members giving ongoing commentary on the markets and how our portfolio is performing so you'll always be aware of what is happening.
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If you have any other questions you're welcome to email us at support@clickcapital.io