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Five Stocks
Risk-Adjusted Stock Picking

Every investor is a stock picker at heart. But to do it right, every pick requires some degree of heavy lifting in terms of time and research, not to mention attentiveness once the trade is made. The latter, because every pick requires two decisions: when to get in, and when to get out.

The Five Stocks monthly trading strategy promises to crunch the data and shoulder that heavy lifting itself, providing a rules-based algorithm specifically tuned to stock selection.
Five Stocks is our one and only true stock-picking model. Each month it selects five individual names from a curated portfolio of U.S. stocks listed on the Nasdaq and the NYSE. These are not your penny stocks or your untested IPOs. Rather, these are among the largest names in the exchanges, stocks that figure prominently in benchmark indices including the Nasdaq 100, the Dow Jones Industrial Average, and the S&P 500.

​This is a guns blazing, pedal-to-the-metal strategy.

A Quick Take
Five Stocks is all about risk-adjusted returns, a measure of an investment’s return that takes into account the degree of risk involved in producing that return. There are a number of methods for calculating the risk-adjusted returns on an investment. Our strategy leans heavily on the Sortino ratio. It's a refinement of the Sharpe ratio but only penalizes the returns which have downside risks.

Still, caution. Keep in mind that individual stocks carry risks that are times greater than ETFs, the assets of choice in our other models, and any measure of risk-adjusted return is based on historical data and does not guarantee future performance.

In sum, the Five Stocks strategy provides a rules-based algorithm specifically tuned to stock selection, holding five individual names each month selected for their risk-adjusted return over time. The strategy combines well with more conservative, ETF based strategies like The 12% Solution, Bond Bulls, or Lean Muscle.
There's more information below, but if you're ready, why wait? You can be placing your trades today.  

  • Immediate access to the private Members Page.
  • Download the current Newsletter.
  • $24.95 per month as part of the MAX Pak.
  • Try for 60 days FREE.
  • Cancel any time; no questions, no hassle.
Need more information? OK, let's go in-depth...

Numbers & Charts
Over the past 17+ years, from 2008 to 2025 YTD, Five Stocks has delivered a 136-fold improvement in Total Return over our benchmark SPY. 
Total Return Chart
Five Stocks vs. SPY, our proxy for the S&P 500
Total Return | 2008 - 2025 YTD (updated monthly)
Chart courtesy ETFreplay.com
Annual Returns
Five Stocks vs. SPY
Annual Returns | 2008 - 2025 YTD (updated monthly)
Now, individual years can vary - sometimes dramatically. So just a heads up: not every month, not every year is a slam dunk. This is the stock market, after all. 

​In sum, over the longer term, Five Stocks has demonstrated the ability to capitalize on the momentum of individual U.S. equities while maintaining a reasonable risk profile.

Strategy Assets
At the heart of the Five Stocks strategy is the equity portfolio. This is a curated portfolio of large and mid-cap stocks, the components of which are subject to change over time.
Portfolio (in general)
​In general, the portfolio is overweight technology and underweight financials. Beyond that, represented industries include: aerospace and defense, broadcasting and entertainment, consumer services, financial services, food and beverage, home improvement, industrial and manufacturing, information technology, insurance, managed health care, medical appliances and equipment, pharmaceutical, retailing, semiconductor, software, transportation, utility services and more.

Because the portfolio will periodically add or remove a company, the strategy's list of potential candidates is ever changing. The portfolio will always have a minimum of 50 names, and no more than 100. The current number of components is 83.
Black Swan Hedge
​VIXM, the ProShares ETF offering exposure to the S&P 500 VIX Mid-Term Futures Index

The Mechanics
At any given time, Five Stocks holds 5 individual stocks from a curated list of some of the largest U.S. companies, each making up 20% of the strategy. Details below.
Risk-Adjusted Returns (selecting the Five)
Once a month, the strategy calculates the Sortino ratio of all the stocks in our equity portfolio (80+ names). It then sorts those stocks and selects the Top 5 names with the highest Sortino ratio. Those five stocks are the picks for the month.

What is the Sortino ratio? It's a method of measuring the risk-adjusted return of an investment asset (or portfolio) over time. It's a modification of the popular Sharpe ratio. But while the Sharpe measures risk-adjusted return by penalizing both upside and downside volatility, the Sortino penalizes only downside volatility.

Because the Sortino ratio focuses only on downside volatility (the negative deviation of an asset's returns from the mean), it is thought to give a better view of the asset's risk-adjusted performance.

The higher the Sortino ratio, the better the risk-adjusted return.

A hedged version, adjusting the asset allocation to include a volatility ETF, provides a safety net for sudden market crashes.

What You Get
Monthly Newsletter
Before the market opens on the first trading day of the month, you'll receive an email newsletter detailing the same actionable buy/sell signals that I will use to trade the strategy in my own account.

Members Page
Subscribers also gain access to the strategy's Members Page, offering up more details including:

  • FAQs
  • Month-to-date returns
  • Weekly performance summaries
  • Total Return charts from 2008 to present
  • A downloadable version of the newsletter
Here's a sample email newsletter...

Ready?
Five Stocks is $24.95 per month as part of the MAX Pak package plan (not available as a stand-alone strategy). Cancel at any time; no questions, no hassle. Follow along and see how the strategy catches market moves to the upside, while protecting hard-earned portfolios against major downdrafts.

First 2 months are FREE.
"I love the 5 stocks concept.  Thank you for your efforts to continue to improve and develop resources." --David U.
"I'm very excited about this subscription:  love trading stocks so this adds a little more pop to our investment style." --Jen M.
"You are one of the main recommendations I give co-workers when I talk stocks with them! " --David B.
"I thank you for the very reasonably priced subscription models...  I've been a follower since I bought your first book, I believe, in 2019." --John W.
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