Kareem from Share here. It’s the start of a new month, which means it’s time to look back on our top performing strategy and the stocks in it. This is often surprising, and can give a hint about investor sentiment (where a lot of investor dollars are flowing, basically).
A quick note about how these returns are calculated: these are returns based on equal weight dollar-cost averaging (or weekly recurring buys across all the stocks in equal amounts). So it’s not just the average price movement of all the stocks over the month, which in some cases may be significantly higher (or lower) than the returns posted here. This is because dollar-cost averaging into a stock who’s price is rising means your purchase price is rising along with it. If you want to see this effect in action, try our Simulator.
This month the top spot was taken by our Fintech strategy. This is surprising because fintech (which means a lot of digital brokerages, payment processors, and lenders) as a sector has been particularly hard hit over the past 12-18 months. Many of the names in this strategy, including Affirm, Coinbase, Robinhood, Sofi, and Upstart, have seen drawdowns of 50-80%.
In this case, Fintech was the only strategy to give a double-digit return over the month. Every single stock in this strategy provided a positive return over the month, with some returning upwards of 20%.
Three major outliers, Affirm, Sofi, and Coinbase all saw their stock price increase by 50% or more during the month of January. Since these are lending and crypto companies which tend to benefit from a low rate environment, it’s possible this indicates some investors believe the Fed is going to stop raising rates or even cut rates soon (note, Share has no opinion here and is not offering any speculation on monetary policy). Overall, it seems to indicate an optimism about the future state of the markets.
If you want to explore these results yourself, the Share Simulator is available at https://simulator.tryshare.app and allows you to simulate weekly buys of our strategies, as well as create and test your own.
Thanks for reading!
Wow super interesting! Thanks for “share”-ing!