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The IBD 100: Does It Really Beat “The Market”?
AdvisorStone, Gregory R.
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IBD 100 proclaims itself to be the number one investing strategy and that it has yielded far better returns since its inception than S&P500 during the same period. I examine the validity of these claims by analyzing the performance of IBD100 stock recommendations made between July2005 and Dec 2009. Although IBD yielded 5.54% in comparison to -8.18% by S&P500 during the study period, deeper analysis of the relative performance to the benchmark index reveals that IBD100 stock are smaller and more growth oriented than those of S&P500 and that when comparing the returns of the IBD 100 to more appropriate benchmarks, the excess performance disappears.