How our performance returns are calculated
The Australian Stock Report CFD Report has one Model Portfolio for members to follow.
At any one time we are likely to be holding a number of long (buy) positions and a number of short (sell) positions. These positions are also likely to be spread across different instrument classes - such as ASX equities, overseas equities, indices, currencies and commodities.
The CFD Report performance data represents the period from inception (1 November 2004) until June 30 2013, based on the recommendations comprising the Model Portfolio, which are structured based on our CFD Report Capital Management Model (CMM).
The current CMM is structured around a $50,000 hypothetical portfolio and a $1,000 (2% of overall capital) maximum risk per trade. Prior to 1 September 2010 the CMM was structured around a $10,000 hypothetical portfolio and $200 (2%) maximum risk per trade.
Some trades included in the performance calculations may have exceeded the risk per trade parameters mentioned above due to contract sizing.
All trading suggestions are assumed to have been executed on the IG Markets Australia, CFD trading platform.
Due to the leveraged nature of CFDs, position sizing is not compounded relative to the cumulative portfolio balance. This ensures the standard risk levels are maintained as the portfolio balance rises/falls.
The Australian Stock Report Traders Report has one Model Portfolio for members to follow.
At any one time we are likely to be holding a number of long (buy) positions and a number of short (sell) positions. These positions comprise ASX-listed securities only.
The Traders Report performance data represents the period from inception (10 January 2003) until June 30 2013, based on the recommendations comprising the Model Portfolio, which are structured based on our Traders Report Capital Management Model (CMM).
The current CMM is structured around a $100,000 hypothetical portfolio and a $1000 (1% of overall capital) maximum risk per trade. Prior to October 2010, the Traders Report CMM was structured around a $50,000 hypothetical portfolio and trades were classified as 'Core' or 'Speculative' risk. Capital committed to Core trades was 10% of the cumulative portfolio balance and capital committed to Speculative trades was 5% of the cumulative portfolio balance.
We assume that the long recommendations are traded via equities on the ASX, on an unleveraged basis (no borrowing). Given that it is impractical to short sell ASX listed equities with a standard share trading account, we assume that all short recommendations are traded using CFDs on the IG Markets Australia, CFD trading platform.
For short positions, the returns are calculated based on the grossed up trade value, not the CFD margin. The returns do not include interest earned from short CFD positions, although this may have a material, positive impact on our performance data.
The returns are calculated on a compound basis, which means that they represent the return of a holder of the portfolio from the portfolio's inception.
Our Investors Report has four Model Portfolios for members to follow, based upon their risk profile.
Position sizing within the Model Portfolios is structured using specific portfolio weightings given to each individual stock within the portfolios.
Any uninvested amount is assumed to be invested in a high yielding, at-call, cash management account, with cash returns based on the RBA's target cash rate.
Our returns are calculated on a compound basis which means that they represent the return of a holder of the portfolio from the portfolio's inception.
The portfolios have different inception dates, so the performance data above tracks performance from 10 March 2006 (Growth & Income portfolios), 17 April 2007 (Absolute Return portfolio) and 1 July 2007 (Balanced portfolio).
Common Performance Returns Elements
The market benchmark used for all reports is the S&P/ASX 200 Index (XJO).
Transactions suggested in reports were not actually executed by Australian Stock Report but the entry and exit points flagged in our reports were able to be achieved in the market, under actual market conditions and prevailing liquidity.
The Australian Securities and Investments and Commission (ASIC) discourage the use of annualised performance data. For this reason, Australian Stock Report does not annualise any performance data.
Due to the significant diversity in the fees charged by stockbrokers, this data does not include any execution or settlement costs, such as brokerage or financing fees.
The data reports performance which doesn't take into account transaction costs. You should check with your stockbroker or CFD Provider as to what fees might be incurred in executing the trades suggested by our reports. Readers should also consider that products such as foreign exchange, indices and commodities are commission free.
Past performance of trades suggested by Australian Stock Report is not necessarily a reliable indication of future performance. Hypothetical performance results have many inherent limitations, some of which are described below.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
Hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading.
For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results.
There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, all of which can adversely affect actual trading results.