About SuperCap25
The SuperCap25 was created by a 30 year Wall Street veteran to counsel retail investors.
What is SuperCap25?
Simply stated, SuperCap25 is an investment portfolio consisting of the 25 largest U.S. companies ranked by market capitalization and weighted equally so that each stock has 4% capital allocation. The top 25 are the most durable through multiple business cycles, most liquid and favored by large institutional investors. They also typically pay dividends and recover quickly after market corrections.
How Does SuperCap25 Work?
The idea is to have a stock portfolio of the very best blue-chip companies that are diversified across industry groups so that the risk level is like that of the S&P 500 or the Dow Jones Industrial Average (30 stocks). SuperCap25 companies have endured countless economic cycles because their products and services add convenience and value to our lives. Keeping it simple with Google, Nvidia, Johnson & Johnson, Exxon Mobil, Apple, Amazon and more, will keep your portfolio sturdy, and investors find they don't worry about any of these companies during a market correction.
What Is the Advantage of Buying Supercap25 vs. S&P Index?
The SuperCap25 has several advantages. Over the prior 20 years, the SuperCap25 has provided a better risk-adjusted return vs the S&P 500 over time. By owning the SuperCap25 you have an investment that has correlated to the S&P 500 97% over the past 20 years, but you get a focused portfolio packed predominantly with dividend payers who are typically more reasonably valued than the S&P 500, despite their marquee names. Keeping it simple with Google, Nvidia, Johnson & Johnson, Exxon Mobil, Apple, Amazon and more, will keep your portfolio durable, and investors find they don't have to worry about any of these companies during a market correction.
How Do I Know When To Sell?
SuperCap25 portfolios can be held for 12 months and then rebalanced and reconstituted. Of the components that have appreciated, enough is sold to return them to a 4% weighting. For those that have underperformed, additional shares will be bought to bring them back to a 4% weighting.
If the top 25 are different, the new companies that have appreciated onto the list will be purchased, and those who have been pushed off the list will be sold. The idea is that market values of the components will be reset every trading day by market forces.
Stocks that are losing sponsorship are being liquidated and those that are gaining sponsorship are being bought. A truly Darwinian process that uses market intelligence to pick the winners and sell losers.
How SuperCap25 Succeeds
The success or failure of the investor is often due to compliance with their investment plan. A 30-year study proves investors typically panic during emotional market declines and buy during times of market euphoria, thus ensuring sub-optimal returns. By investing in brand-name companies, the investor is more likely to hold what they know rather than panic. A traditional diversified portfolio may own several opaque investments such as an emerging market ETF or a Global Bond fund; Who really has the confidence to hold such esoteric investments during a 30% decline?
How Safe Is SuperCap25?
Of course, everyone is concerned about a geopolitical risk, a currency collapse, a recession or depression. Short-term events will impact the markets and the SuperCap25 along with it; however, the SuperCap25 companies have endured countless economic cycles because their products and services add convenience and value to our lives.
They are pure vanilla, iconic, U.S. Blue Chip stocks. Keeping it simple with Google, Nvidia, Johnson & Johnson, Exxon Mobil, Apple, Amazon and more. Do you really need to worry about these companies during a market correction?
The simple answer is no, you don’t need to worry. Successful investors buy more when their shares are on sale, they use market declines to buy on the cheap.
