How do I match the performance of a ProPicks AI strategy?

ProPicks AI displays strategy performance using equal weighting primarily to illustrate the overall effectiveness of our stock picks and provide transparency into how our model-driven insights compare to benchmarks. Equal weighting is chosen because it eliminates size biases present in market-cap weighted approaches, gives each stock selection equal importance in demonstrating our model's predictive capability, and provides a more diversified exposure across our recommended stocks. While equal weighting offers a straightforward way to demonstrate our strategies' success, it may not be optimal for every investor. Your personal investment approach should consider your risk tolerance, market conditions, and individual circumstances.

If you choose to follow the equal-weighted approach shown in our performance metrics, here's how to do it*:

1. Follow the entire monthly portfolio of stocks with equal weighting (not just selecting individual stocks)
2. Equal weighting means dividing your investment amount equally among all stocks in the strategy
3. Rebalance monthly based on the strategy updates sent via email and posted on our platform

For example, with $10,000 to invest in the Dominate the Dow strategy which includes 10 stocks, you should allocate $1,000 to each stock position ($10,000 / 10 stocks). If your broker offers fractional shares, simply divide your total investment by the number of stocks. Without fractional shares, you'll need to round to whole shares, which may cause slight deviations from perfect equal weighting.

Let's look at a concrete example using the January 2025 Dominate the Dow strategy with $10,000 to invest:

With Fractional Shares ($1,000 per position):

1. Apple: 4.49 shares = $1,000 ($222.78/share)
2. Amgen: 3.63 shares = $1,000 ($275.42/share)
3. Home Depot: 2.41 shares = $1,000 ($414.50/share)
4. IBM: 4.45 shares = $1,000 ($224.80/share)
5. Johnson & Johnson: 6.81 shares = $1,000 ($146.82/share)
6. Merck: 10.47 shares = $1,000 ($95.55/share)
7. Microsoft: 2.25 shares = $1,000 ($444.06/share)
8. Sherwin-Williams: 2.78 shares = $1,000 ($360.15/share)
9. UnitedHealth: 1.88 shares = $1,000 ($532.51/share)
10. Verizon: 25.29 shares = $1,000 ($39.54/share)

Without Fractional Shares (rounded to whole shares):

1. Apple: 4 shares = $891.12
2. Amgen: 4 shares = $1,101.68
3. Home Depot: 2 shares = $829.00
4. IBM: 4 shares = $899.20
5. Johnson & Johnson: 7 shares = $1,027.74
6. Merck: 10 shares = $955.50
7. Microsoft: 2 shares = $888.12
8. Sherwin-Williams: 3 shares = $1,080.45
9. UnitedHealth: 2 shares = $1,065.02
10. Verizon: 25 shares = $988.50

Total investment without fractional shares: $9,726.33 (varies from $829.00 to $1,101.68 per position)

Important Considerations:

• Monthly trading actions may incur transaction costs and tax implications
• Consider consulting a tax advisor regarding implications of monthly trading
• An equally weighted portfolio can only be faithfully replicated using fractional shares
• Always conduct your own due diligence before investing

The strategy's performance statistics assume exact equal weighting and monthly rebalancing, as well as buying all stocks before the market opens for the first trading day in a given month. Your actual returns may differ based on:

• Whether your broker offers fractional shares (See Broker directory to learn more)
• Transaction costs
• Tax implications
• Timing of trades
• Any adjustments you make to the equal weighting

Disclaimer: Even using fractional shares and buying on the first day of the month, the performance of your portfolio may differ from the ProPicks AI strategy you are following due to after-hours/premarket stock movements, as well as the spread at the time you buy the stock. ProPicks AI’s performance is calculated by using the final closing price of the month prior to the rebalance for each stock, not considering spreads. 

For more info on how after-hours/premarket trading, as well as spreads, work, please visit our academy page.