How I Use Seeking Alpha Premium. Is this dumb?
Is this strategy dumb? I've been running it since the beginning of the year in my Roth IRA and I'm up about 30%.
Hold 16 stock positions that are all strong buys (at least at the time of picking them), equal weight contributions.
Find these stocks by using a Screen on SA: Quant rating: Strong Buy only, lowest factor grade for any factor is C-, except valuation, which can go to D+. 500M floor for market cap.
Buy companies that have the highest quant rating, while employing sector caps. I have no more than 4 stocks per sector, except when things get weird. For example, when the Iran war started, the quant screen started getting crowded with energy stocks, so I constricted the energy sector to 2 stocks.
Reconstitute this portfolio every quarter (Jan 1, Apr 1, July 1, Oct 1).
Also, only buy stocks that are tradeable on Robinhood with fractional shares.
Sell a stock immediately when the quant rating downgrades it to a Hold and use the proceeds to purchase the highest quant-rated stock that doesn't violate sector cap rule. This is the rule I'm least sure about. It's saved me a couple times, but it has also burned me. It's hard to tell whether it has been a benefit in the aggregate.
This is all in a Roth IRA, so taxes aren't really a consideration. Also, it only represents about 20% of my overall retirement picture so I'm not betting the whole bagel on this strategy.