Due to comments posted over the last few days, I’m taking another look at the Terrific 20 in hopes this post will answer a few questions. Perhaps this blog will raise more questions. The Terrific 20 uses the Rutherford 10 as its core holdings. That is something I recommend to all ITA readers. After the basic 10 ETFs, add you own ETFs and/or stocks of interest.
Main Menu: The following settings are considered to be the default values for the Tranche Momentum Model (TMM). Check the ROC periods and weights. These differ from the Dual Momentum Model.
Tranche Momentum Recommendations: The following screenshot is the key worksheet as this is the table that provides investing guidance. Since five (5) is set as the maximum number of assets, we see five securities recommended over under the REDA Expectancy section, provided there are five that rank above SHY in performance.
We are looking for tickers that have a Group rating of 1 (rare), 2, or 3. If a security is rated 4 or 5 (IDV and QQQ) we continue to hold them in the portfolio, but will not add new shares except in special cases. For example, the security may provide additional diversity, the PnF Ratio is very strong, or the ticker has a high absolute momentum rank. IDV is such a security. Next move is to see what the Heikin-Ashi candles are flashing. We want both to be positive. VEA, MTUM, and SCZ all qualify for purchase.
PnF Ratio: There is one more screen or test I run the securities through before making a purchase. Here is an example for VEA and the link for you to bookmark and use. VEA is barely a buy as the X’s in the far right-hand column just match the height of the preceding column of X’s.
One additional hint. Remove the ticker and colon and run a PnF analysis on RSP alone. We want RSP to be positive as is now the case. When we find ETFs that are outperforming a bullish RSP, we are “golden.”