The stock market is awakening from its slumber and Globe readers are reaping the rewards. Their stock picks in our inaugural Investing Club Challenge are back to bludgeoning major benchmarks – and, well, humiliating Globe reporters.
As you’ll recall, we asked readers earlier this year to send us their Top 3 stock picks, to be held for 12 months. We then collated these submissions – more than 500 of them – to find the 12 most popular picks for the Readers’ Portfolio. A team of Globe investment reporters assembled their own slate of stocks.
The competition kicked off on March 13, with monthly updates since then.
Last month wasn’t pretty for anyone, after surging bond yields and war in the Middle East made hard cash look like the only asset worth clutching. Well, that and a 96-year-old bottle of single malt Scotch whisky from Macallan, which fetched almost £2.2-million ($3.7-million) at auction on Saturday.
But look what’s happening now: The U.S. Federal Reserve has put rake hikes on hold, bond yields are easing back from multiyear highs and stocks are rallying. There’s even talk of the U.S. economy pulling off that rarest of feats, a soft landing, where high inflation declines without a recession. (Stay tuned.)
A seasonal tailwind from a historically strong fourth quarter means that good times for investors could persist through the end of the year if a Santa Claus rally takes hold. And the release of a “new” Beatles tune – with an assist from artificial intelligence – could be warming our hearts, which can’t hurt either.
Globe readers will likely feel pleased with their results so far. The 12 stocks in the Readers’ Portfolio are up 19.7 per cent (including dividends) since the start of the competition eight months ago.
That’s an impressive figure on its own, but it looks even better next to key competition: indexes. Globe readers are beating the total return of the Standard & Poor’s 500 by 4.1 percentage points, a level of outperformance that even the savviest of hedge fund managers would be pleased with.
Even more impressive, the Readers’ Portfolio is outperforming the plodding total return of the S&P/TSX Composite Index by a whopping 16.8 percentage points.
Meanwhile, our own top picks, which we’ve assembled into a portfolio called the Globe Hot List, did not fare well, slumping 9.5 per cent and offering a compelling reason why most investors should stick with the pros, or consult Globe readers.
Credit our readers with riding the success of a few standout stocks.
Shopify Inc. may have looked like a burnt-out tech stock when this competition began, beset by layoffs, sputtering momentum in its e-commerce business and a share price well off its previous highs.
Since then, the Ottawa-based company has become a turnaround story, especially after exceeding revenue expectations in its third-quarter financial results, released earlier this month. Since Nov. 2, the stock has gained nearly 37 per cent.
Nvidia Corp. is no slouch either, rising 20 per cent since the end of October. The U.S.-based tech company continues to capture investor attention as a direct play on AI, and the stock has more than doubled since the competition began.
With bond yields now declining, perhaps the portfolios will benefit from recovering dividend-paying stocks, including Bank of Nova Scotia and TC Energy Corp. TRP-T These types of stocks have been languishing throughout much of the competition, as safe investments like money market funds and guaranteed investment certificates offered stiff competition to stocks.
As investors start moving cash from the sidelines and into the stock market, perhaps dividend-payers will see an uptick in interest. If the Readers’ Portfolio starts firing on all cylinders, though, even the pros are going to have a lot of explaining to do.
David Berman