The First Half of 2015 Track Record at Terry's Tips
We currently carry out 11 portfolios at Terry’s Tips. Paying subscribers can follow the results of all 11 (some newsletters only reveal their winning portfolios to all subscribers). Eight of the 11 portfolios can be traded through Auto-Trade at thinkorswim (so you can follow a portfolio and never have to make a trade on your own). The 3 portfolios that cannot be Auto-Traded are simple to do on your own (usually only one trade needs to be made for an entire year).
Ten of our 11 portfolios are currently profitable, having an actual value which is greater than their starting investment value. Some portfolios are dramatically ahead of where they started.
The only losing portfolio is based on Alibaba (BABA) – it was a bet on the Chinese market and the stock is down over 30% since we started the portfolio at the beginning of this 2015 (due to the leveraged nature of options, our portfolio loss is much greater that the stock drop).
The best portfolio for 2015 is up 55% through July and will make exactly 91% if the three underlyings (AAPL, SPY, and GOOG) remain the same or move higher from where they were at the end of July. In fact, they can fall by varying amounts and the full 91% will come our way - GOOG could fall by $150 over the remaining 5 months of 2015 and our investment in GOOG would still make 100% for the year.
Another portfolio is up 44% for 2015 and is guaranteed to make 52% for the year even if the underlying (SVXY) falls by 50% between now and the end of the year. We feel quite confident that that will happen. A portfolio based on Costco (COST) was started 25 months ago and has gained more than 100% while the stock rose 23% - our portfolio outperformed the stock by better than 4 times. This is a typical ratio – portfolios based on Nike (NKE) and Starbucks (SBUX) have performed similarly compared to how well the stock itself performed.
Paying subscribers can choose to follow any (or none) or all of these actual portfolios, either on their own or through Auto-Trade. Through July of 2015, all but one of the portfolios is solidly ahead for the year, and the average gain is many times greater than the paltry 2 ½% that the market (the S&P 500) has picked up over this same time period.
The Long-Term Track Record at Terry's Tips
Terry’s Tips has operated sample option portfolios since 2003 for their subscribers to follow or mirror in their own accounts. These portfolios are actual portfolios, and results include all commissions that an investor would pay at thinkorswim, Inc. by TD Ameritrade. Many option newsletters conveniently (for them) do not include commissions in their performance numbers. This makes their results look a lot better than they actually are because commissions are a significant cost of trading options (unlike stock trading which involves much lower commissions).
In most of these years, the option portfolios have beaten the market averages by a very large margin. In some years, the portfolios have incurred losses similar to the magnitude of the market losses.
Option trading involves leverage, and leverage works in both directions. Gains (and losses) are often greater than changes in the market. However, we have tried to minimize the losses in down years so that our losses are less than those of the markets in general, and to enjoy greater gains than the markets in good years. Most of the time, we have been successful in carrying out these goals.