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Virtual portfolio modeling
#1
You can create a portfolio in Google Sheets by entering some formulas that stream stock prices, and building in some metrics like gains and losses on your cost basis. So, at the risk of spending even more time thinking about investing than I already do, I decided I might as well test out a few strategies with virtual portfolios and see how they perform over time. The only complication will be tracking dividend payments and manually reinvesting the dividends.

There are 5 strategies being compared.
DGI: Classic dividend growth stocks
Deep value: Oversold or special situation stocks, i.e. extreme buy-the-dips
High yield: Unapologetic yield chasing
Growth: High earnings growth (dividend optional)
Debt free: Debt/equity ratio at or near 0

Each portfolio starts with exactly $100k divided up into 5-8 positions, roughly evenly weighted as of the weekend of 11/2/14. There is a small cash balance to round up to $100k to start. Since I don't know of any notification system for dividends received on positions I don't own in real life, I plan to scan for dividend payments every month or so and add them to the cash balance. At the end of each month, I will deploy the cash. All accumulated cash is invested into whatever presents the best value at the time, not necessarily the stock that paid the dividend (no DRIP). Trade fees are assumed to be $0. I decided not to add any virtual cash contributions to these portfolios over time, because that would make it very difficult to track the internal rate of return.

The spreadsheet can be viewed here:
https://docs.google.com/spreadsheets/d/1...sp=sharing

As I write this on a Sunday night, all positions are at the cost basis and all gains/losses are 0, so all text is black and all portfolios are exactly $100k. In the morning when the market opens, positions will start showing red and green. It should be interesting to see how they do against each other.
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#2
(11-03-2014, 02:27 AM)earthtodan Wrote: You can create a portfolio in Google Sheets by entering some formulas that stream stock prices, and building in some metrics like gains and losses on your cost basis. So, at the risk of spending even more time thinking about investing than I already do, I decided I might as well test out a few strategies with virtual portfolios and see how they perform over time. The only complication will be tracking dividend payments and manually reinvesting the dividends.

There are 5 strategies being compared.
DGI: Classic dividend growth stocks
Deep value: Oversold or special situation stocks, i.e. extreme buy-the-dips
High yield: Unapologetic yield chasing
Growth: High earnings growth (dividend optional)
Debt free: Debt/equity ratio at or near 0

Each portfolio starts with exactly $100k divided up into 5-8 positions, roughly evenly weighted as of the weekend of 11/2/14. There is a small cash balance to round up to $100k to start. Since I don't know of any notification system for dividends received on positions I don't own in real life, I plan to scan for dividend payments every month or so and add them to the cash balance. At the end of each month, I will deploy the cash. All accumulated cash is invested into whatever presents the best value at the time, not necessarily the stock that paid the dividend (no DRIP). Trade fees are assumed to be $0. I decided not to add any virtual cash contributions to these portfolios over time, because that would make it very difficult to track the internal rate of return.

The spreadsheet can be viewed here:
https://docs.google.com/spreadsheets/d/1...sp=sharing

As I write this on a Sunday night, all positions are at the cost basis and all gains/losses are 0, so all text is black and all portfolios are exactly $100k. In the morning when the market opens, positions will start showing red and green. It should be interesting to see how they do against each other.

I like it, thanks for sharing. Will be following along with the progress.

I'm a spreadsheet junkie as well, love my google docs.
My website: DGI For The DIY
Also on: Facebook - Twitter - Seeking Alpha
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#3
Ouch, poor timing on ARCP and a black eye for high yield already!
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#4
In the Deep Value portfolio, I sold TIS and bought AIG. TIS didn't meet criteria of being absurdly cheap, and AIG does. TIS was sold for a 1% gain and was held through the ex-dividend date.
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#5
This will be interesting but I'm concerned if it would be representative of expectations.

None would represent a good diversification of the portfolio and the low number of stocks in each would cause one stinker to ruin the rest of the sector portfolio's performance.

I'll be watching out of curiosity but this will take time to unfold. Do you have a time frame planned for how long you're going to maintain it?

Good luck on keeping up with the dividends along with all the other things going on in life.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#6
With the SDRL dividend suspension, I sold it out of the high yield virtual portfolio. I also sold MHG since it's another John Fredriksen company.

Replaced those two positions with ESV and KKR.

November dividends have been received and reinvested for all portfolios, and the total returns reflect those dividends.

(11-06-2014, 11:17 PM)Dividend Watcher Wrote: This will be interesting but I'm concerned if it would be representative of expectations.

None would represent a good diversification of the portfolio and the low number of stocks in each would cause one stinker to ruin the rest of the sector portfolio's performance.

I'll be watching out of curiosity but this will take time to unfold. Do you have a time frame planned for how long you're going to maintain it?

Good luck on keeping up with the dividends along with all the other things going on in life.

True, the lack of diversification makes it not a good representation of any strategy. I kept things fairly concentrated in order to reduce my workload. A real high yield portfolio, of course, would probably include a good 25 stocks or so to diversify the risk. I just don't want to add a bunch more stocks to my radar.

I'll continue the exercise until I get bored of it or life causes me to lose track. Barring those two events, it could go on for years.
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