Today, I unveil my new Large Cap Stalwarts Model Portfolio. I have been working on finding a profitable Model Portfolio that was focused on Large Cap stocks since the beginning of the year. It is not easy to find consistently outperforming Large Cap strategies since these stocks have heavy coverage from the investment community. There is a much smaller chance to “find diamonds in the rough” when thousands of analysts are looking too.

The RSP (Invesco S&P 500 Equal Weight ETF) is being chosen as the benchmark to compare to since it is equally weighted between the 500 stocks that make up the S&P 500 index. The Large Cap Stalwarts Model Portfolio is also equally weighted large cap stocks.

The Pros for the Large Cap Stalwarts:

• There is between 10 to 20 stocks in the Model Portfolio at any given time. This is a very manageable number. The stocks are always equal weighted in the Portfolio.
• The Large Cap stocks are very liquid since they represent the largest companies in the USA. There should not be any problem placing market orders to buy and sell.
• The backtest shows that from 2004 thru 2022, the Large Cap Stalwarts outperformed the RSP ETF by 935% to 559% compounded yearly. This is a 67% outperformance over RSP over that time.
• The backtest shows that over the 19 years tested, the Large Cap Stalwarts outperformed RSP in 12 years and underperformed in 7 years.
• The Model Portfolio will be made up of USA centric stocks. Very little or no International Stock exposure.

The Cons for the Large Cap Stalwarts:

• The turnover should be about 50% each month. This is designed to keep the selections fresh and timely. Some investors might find this too much work, since it requires some activity once a month.
• Since this a concentrated Model Portfolio, there is always the possibility of an outlier causing an outsized drop in the total Portfolio performance. You can also have an outlier cause an outsized increase in the total performance too.
• The Model Portfolio trails the RSP benchmark +3.0% to +5.4% for Year to date performance, as of 6/19/2023. The Model Portfolio has some catching up to do to best the RSP by the end of the year.
• The Large Cap Stalwarts does not have the backtest performance that Small Cap Discoveries, Mid Cap Flyers or CANSLIM Growth has. It is more boring. If you are looking for dramatic moves, the other three Model Portfolios are what you are looking for.

Conclusion: This new Model Portfolio should fill out my lineup to cover all size of stocks in the USA. It is not as dramatic as my three other Model Portfolios, but over time I expect the return will be very good.