In a mostly flat month of May, the Barron’s 400 Index, powered by MarketGrader, beat the major market benchmarks once again. The index was down 1.0% for the month compared to -1.4% for the S&P 500, -1.9% for the Dow Jones Industrial Average, -1.3% for the NASDAQ Composite and -1.4% for the Dow Jones U.S. Total Stock Market Index.
Year to date the Barron’s 400 Index leads the pack with a return, as of May 31, of 11%.
Barron’s 400 Index: 11%
Dow Jones Industrial Average: 9%
Dow Jones U.S. TSM: 7%
S&P 500 Index: 7%
NASDAQ Composite: 7%
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1) Are we not over-due for a Barron’s 400 Rebalance?
2) What VALUE, Momentum and Long Term Management metrics have you found most predictive of performance?
2b) Please consider expanding these as well as Long Term: Dividend growth, Outstanding Management and other Valuation metrics as we enter this period of slower growth?
Thanks!
Dear Subscriber,
Thank you for your message. The Barron’s 400 Index is not due for another rebalance until the third week of September. The index rebalances semi-annually and the last time it occurred was in March.
With regards to your second question, we don’t have a simple answer. You touched on three different areas of analysis, each of which has unique attributes and benefits. We believe in an all-inclusive approach by which companies are not analyzed according to one or two metrics of performance but rather across indicators that measure its overall financial health. This is why MarketGrader is built the way it is. With regards to Momentum, we understand it plays an important role in today’s short-term focused markets. As such we have introduced our Sentiment indicator to measure factors, including price trend and momentum, that reflect supply and demand conditions in the market for a company’s shares regardless of its fundamentals.
Finally, regarding your suggestions, we do have a new series of dividend-based stock idea lists in the works. One of them will focus on identifying and pointing out to our subscribers companies that are consistently growing their dividend in a way that is sustainable. We will be introducing a few other new idea lists and a brand new interface for them as well. We’ll write more about them as we get close to launching them, which you can expect to happen later this summer. In the meantime please let us know if you have any other questions or suggestions and keep the feedback coming. Thank you.
Regards,
Carlos Diez