July 1, 2013

JP Morgan stock picks versus the market - 6 month update

OK, at the end of last year, JP Morgan gave us their stock picks for 2013.  I wanted to see how they'd stack up against the market.  Here are the results for the first six months of 2013.
I've been curious if the so called professionals were any better than the market in general.
I figured the fairest way to do this was to pretend to buy their stock picks on January2 during the day, an average price and then compare it to a few broad based ETF's (exchange traded funds).  The original article is here.

The closing prices for JP Morgan picks at the close of June28 below.
BA $102.44
BAC $12.86
COF $62.81
MCD $99.00
V $182.71
AAPL $396.53
EBAY $51.72
WFM $51.48 (after a 2-1 split)
SBUX $65.51
TGT $68.86

The closing prices for the ETF's are below.
VTI $82.70
SCHB $38.91

The bottom line is that the JP Morgan picks (without dividends) averaged a nice 9.3% gain.  That's pretty good and you'd probably pat your broker on the back, six months, not bad.  BUT WAIT.  If you bought the broad based ETF's, you'd have averaged 10.9% (without dividends).

Most likely you would have paid commission to your stockbroker or a flat fee to your financial advisor for those picks which would have lowered your returns.  To be fair, you would have paid a transaction fee to buy the ETF's as well but it would have been considerably less.

Once again, as I've always said, with all due respect, your stockbroker or financial advisor has proven here they provide little in the way of value to an investor and that you should have the person who cares the most about your money handling it - YOU !!!