Lets start the contest for 2015. Given that the market has run up a lot and is nowhere as attractive as beginning of last year, we should focus on returns as well as risk this year. I suggest following set of rules. Also let us have more flexibility this year to keep everyone interested.
1). Number of Stocks- 5 (min) to 10 (max) (Cash can be 11th entry)
2). Allocation per stock- 5% (min)to 20% (max)
3). Start competition based on 9th Jan 2015 closing price. Last entry accepted till 3.25 PM on 9th Jan 2015.Absolutely no new entries after this time.
4). Cash allocation is allowed ( 0 to 100%), but returns will considered to be Zero for cash part.
5.Quartely updates allowed to the portfolio.
)- You need to share the new % allocation before 3.25 PM on 3rd April, 3rd July & 2nd Oct ( all Fridays, so that I have time to update)
)- Your closing balance on these days will be reallocated based on new percentage allocation shared by you
)- Any changes to the portfolio can be done. But new stocks added should be between 5%-20%.
)- An existing stockwith morethan20%allocationcanbe reduced if desired. For e.g a stock has run up and has 30% allocation in your portfolio on 3rd April. You can assign anything between 0-30% for this stock OR could also remove from portfolio.
)- An existing stock with less than 5% allocation can be assigned any allocation between 0-20%.
)- You still need to have between 5 to 10 stocks and an allocation to cash if required.
6). Dividends will be ignored.
7). There willbe multiple winners this time based on
)- Highest Return for the year
)- Best Quarterly returns - for each quarter
)- Sharpe Ratio (standard deviation will be based on monthly closing prices) http://www.investopedia.com/terms/s/sharperatio.asp
Please provide any other suggestions for the competition.