Top 100 Index Rises 16.5% a Year for 5 Years Through Aug. 2015Through Aug. 31, the BetterInvesting Top 100 Index (BIXX), reflecting the portfolios of Main Street investors, increased by 16.5 percent annually for the previous five years, versus 16.8 percent for the Standard & Poor's 500 Equal-Weight Index (based on a total return for both indexes in which dividends are reinvested).
BIXX's total return index ended August at 320.72, a 6.3% decrease from 342.34 at the end of July. The index was 149.72 on Aug. 31, 2010. Without dividends reinvested, the index was 250.46 at the end of August, up 14.3 percent over five years.
The BetterInvesting Top 100 Index comprises the most popular holdings of investment clubs, employing annual data from the myICLUB.com online club accounting program. Solactive calculates the index, which began on April 9, 2007, at a base value of 150. BIXX is equal-weighted, meaning that each component has a weighting of 1 percent.
BIXX reflects actual portfolio decisions by individual investors in investment clubs, while other indexes are weighted heavily toward decisions by large institutional investors. BetterInvesting's individual members and investment clubs tend to have a longer-term focus than do institutions, with clubs' average holding period for stocks at 3.0 years in 2014, according to myICLUB.com data.
Holding quality stocks selling at reasonable prices for the long term allows clubs and individual investors to benefit from the return these stocks often earn when the market recognizes their excellence. Long-term investing also reduces the costs of trading, which effectively increases return.
In July, the most common stocks acquired by investment clubs that subscribe to myICLUB, in terms of number of clubs buying, were:
1) Apple (AAPL)
2) Walt Disney (DIS)
3) Gilead Sciences (GILD)
BIXX includes companies of all sizes, from small and medium-size firms to the world's largest companies.
To see the top 100 companies held by BetterInvesting members, go to the BetterInvesting website at www.betterinvesting.org.
To track the performance of BIXX, go to the Solactive site: www.solactive.com/?s=betterinvesting+100.