A DIY Guide on How to Invest Using Guru StrategiesYou have seen how our Guru Strategies’ model portfolios outperform the market, and you are thinking of investing using them as a basis. This is a step by step guide on how to invest in the stocks in these portfolios with real money, and achieve similar results. Four (or three) easy steps:
Who Should Invest in Guru Strategies?If you have a portion of your portfolio invested in an index fund, or in mutual funds that have performed poorly since 2007, you may consider instead investing with Guru Strategies. Guru Strategies will most likely outperform the market average, and it is more tax efficient. Compared to investing in an index fund, Guru Strategies' model portfolios are based upon the portfolios of money managers who consistently beat the returns offered by index funds. Unlike investing in mutual funds and hedge funds, you pay absolutely no management fees to invest with Guru Strategies. Typically, these fees consume at least 0.2% of a mutual fund’s portfolio every year. Compared with actively managed mutual funds, you are likely to beat most of them over a period of 3-5 years, since Guru Strategies portfolios employ the best ideas of the most successful money managers in the industry. You do not need to pay the 1% plus management fees that come with the actively managed mutual funds. You can manage your portfolio’s capital gains according to your own tax situation, and be more tax efficient. The only cost to you is the GuruFocus Premium Membership fee of $289 a year. Consider all the other features included in your premium membership. (This is the link for the Free Trial) Decide Which Strategies to Invest with.Since its inception in 2006, the “Guru Most Weighted Portfolio” has outperformed the market by more than 28%. We believe this portfolio will continue to outperform, since this is the portfolio that is based upon the most strongly-held of its Gurus’ convictions. Shown below is the daily updated performance of the portfolio: Decide How Many Stocks to Hold.Since we want to concentrate on the Gurus’ best ideas, we do not want our portfolios to be over-diversified. Instead, they should be diversified just enough to reduce the risk associated with individual companies. We choose to have 25 stocks in the “Guru Most Weighted Portfolio.” Find Out the Current List of StocksIf you do not know which gurus to emulate, just use the default List of Gurus. The performances of the model portfolios are for the default List of Gurus. If you know which gurus you want to include for the “Most Weighted Portfolio”, go to the Aggregated Portfolio of Gurus, select the gurus you want to include, and find out the top 25 stocks in the list. Once you are ready, invest 4% of your portfolio’s cash in each of the 25 stocks. If you have new funds coming in, always invest 4% evenly into each of them. RebalanceAlthough Guru portfolios are updated once a quarter, we recommend you rebalance your portfolio once a year. Gurus generally do not change their most strongly-held investment ideas that frequently. It is also more tax efficient to hold the investment for longer than twelve months. Strategically sell the “losers” before the end of the twelve months but sell the “winners” after the end of the twelve months. In this way you pay capital gains tax at the lower long-term rate instead of the higher short-term rate. We wish you success! Summary:
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Portfolio Performances: (All Numbers do not include dividends, updated daily)
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