Concentration vs. Dilution
If you own a broad index fund, you own 500 - 1,000 stocks. The problem? Many times, a handful of leaders do the heavy lifting while the rest dilute your results.
The Sword is our research tool for identifying the M5 Hierarchy—the five stocks currently exhibiting the highest relative strength and leadership in our proprietary research model. When the Shield is Green, our model favors allocating to these five market leaders to capture the “Momentum Factor.”
⚔️ The Battle Plan: Executive Summary
The Theme: “Sector Rotation.”
The Signal: The M5 Algorithm has identified a clear rotation for January. We are seeing continued leadership in Mega-Cap Tech paired with a constructive rotation into Healthcare.
Model Updates:
In: None.
Out: J.P. Morgan (Previously T5).
Commentary: Professionals don’t look for action; they look for trends. Our current model signals that the strongest move is to maintain our current leadership positions and allow the momentum to work.
⚔️ The Top 5 Leaders (January)
These five names represent the current Sword Rankings
