2020 was not an easy year for us, both as an investor and a human being. Covid-19 is a wretched fate. It has taken over 2 million deaths and infected 100 million more. But it is more than a health crisis. Many of us still go to bed wondering if we’ll wake up with a job tomorrow, as businesses shutter in succession. Economies hit a recession. Stock markets hit rock bottom. A lot of money has been lost.
But a lot of money has also been made.
You’ll see in this year’s Jitta Ranking performance report. Although equity markets nosedived last March when Covid-19 was first declared a pandemic, many of them have already recovered. In fact, some indices have reached new highs, soaring along with the rising number of Covid-19 cases. One has to wonder if the market has forgotten, somehow, that the virus and the resulting economic woes are still imminent.
Buoyed by record-breaking vaccines, stimulus bills and low interest rates, the market has done well considering the challenging circumstances. But Jitta has done even better. Jitta Ranking Top 30, the 30 best value stocks selected by our proprietary algorithm, outperformed 8 out of 13 indices last year—a winning rate of 62%. The winning chance is even more impressive in the long run. Looking back 5, 10 and 12 years, the Jitta Ranking Top 30 beats market indices 77%, 92% and 100% respectively.
The outcome isn’t as surprising as it is gratifying. When we reported Jitta Ranking Top 30 performance at the beginning of 2020, we had already been through a couple tumultuous years due to the U.S.-China trade war, Brexit and the protests in Hong Kong. So we had high hopes, expecting, based on statistics, a well-performing 2020. That was before the universe dealt us a once-in-several-generations wildcard.
Covid-19 was a black-swan event no one could have predicted nor prepared for—not even ‘the Oracle of Omaha’ himself. We at Jitta hadn’t foreseen the unprecedented crisis, and we had no idea how Jitta Ranking would perform. But we didn’t let the panic get to us. After all, Jitta Ranking Top 30 is composed, first and foremost, of quality businesses. They are the kind of businesses that should be able to weather economic turbulence. They are also undervalued at the time of purchase, hence, posing less downside risk. Historically, this kind of “wonderful company at a fair price” tends to perform well after a crisis. Warren Buffett’s portfolio is the living proof of that.
Our back test has shown a similar result. Jitta Ranking Top 30 for 2020 managed to produce positive returns in all but two markets, yielding an average of 18.18%. Meanwhile, only 9 in 13 indices ended the year positive, yielding an average of merely 4.44%.
It’s worth noting that Jitta Ranking Top 30 does not rely on timing the market. Of course, Jitta Ranking Top 30 might have done even better if we had bought right after the market bottomed. Many investors have succeeded in doing so—kudos to them. But the strategy can be a tricky guessing game. We believe in a more reliable, predictable method of disciplined buying and holding. The Jitta Ranking Top 30 strategy adheres to a one-year holding period. The top 30 stocks are hypothetically bought at the beginning of each year and rebalanced at the end of each year. That’s the basis of our back tests and the data you’ll be looking at in this report.
Covid-19 is like a tiring horror movie that keeps churning out subpar sequels. We don’t know when it’s going to end, but like every crisis, it has brought us plenty of opportunities. During the peak of the crisis, investors turned to our website for support. Presumably, they were searching for discounted businesses with great growth potential. The traffic to Jitta.com jumped 77% during the peak of the crisis. Our stock analysis became a source of confidence for many investors worldwide. It fueled our drive to be an even better resource: a high-quality platform offering objective and accurate stock information at no cost.
To achieve that, we launched more stock data on our platform, bringing total coverage to 13 territories worldwide. The list now includes the United States, United Kingdom, Japan, Singapore, Hong Kong, Thailand, Vietnam, and 6 new nations including China, Taiwan, Germany, Canada, Australia and India. You can find the back tests for all 13 here.
We also upgraded our algorithm in December to increase the precision of our stock analysis. The upgrades were two fold:
1. Improved Jitta Line. Jitta Line represents a company’s fair value, which is determined by its cash flows. The upgraded algorithm looks at the company’s cash-flow trajectory as well as consistency during 3-, 5- and 10-year periods.
2. Better tech-stock analysis. The upgraded algorithm puts more emphasis on revenue and cash-flow growth when assessing technology stocks. It puts relatively less weight on net profits compared to non-tech companies. So Jitta Score and Jitta Line can better reflect their competitiveness and financial strength.
You can read more about our algorithm updates here.
Because our algorithm has gone through numerous updates since 2014, we’ve decided to replace the old back-test data set with the new performance data powered by our latest algorithm. We’re still keeping the old data set archived here in case you would like to compare the changes between both versions.
2020 was a year that tested all of us as an investor. Big congratulations if you have passed the test with flying colors—green hopefully. But if you’ve come to a conclusion that managing a portfolio isn’t for you, don’t fret! Many tools are at your disposal, whether it be index funds, ETFs or even Jitta Wealth, our low-cost asset management service. Choose the path that suits you and stay the course. That is the secret to growing long-term wealth.
Now, let’s take a detailed look at Jitta Ranking 2020 Performance.
Returns of Major Stock Markets in 2020
The Covid-19 pandemic brought all stock markets globally to collapse in mid March after this infectious disease could spread fast from Asia to Europe, North America and other regions. More importantly, no one did not expect for serious impacts, signaling the 2020 world economy was unfavourable.
When the pandemic situation recovered and major cities could ease up lockdown measures, economic activities resumed as partially normal. Stock indices could rebound in the second half of 2020. Some markets could make their new high records while some markets were back to the pre Covid-19 level or performed less than the past indies, depending on stock market fundamentals.
In a big picture, overall stock markets were not horrible as investors thought. The above bar chart explains that;
- 13 stock markets that Jitta covers made the average return of 4.44% in 2020.
- Only 4 stock markets performed negative returns – Thailand (-14.79%), the United Kingdom (-14.34%), Singapore (-11.76%) and Hong Kong (-3.40%).
- The remaining stock markets made positive returns, led by TAIEX index of Taiwan at 22.80%, followed by S&P 500 of the United States at 16.26% and Nikkei 225 of Japan at 16.01% which all were unexpected.
In general, the stock markets after the crisis remain bearish with negative returns for a while due to a lack of confidence from investors.
But the Covid-19 pandemic made such a surprising impact as the downside moves were just a couple of months. When investors witnessed potential growth of many technology-related companies, they came back to the stock market where many technology companies are listed; for example, Nasdaq of the United States.
The pandemic has accelerated a huge adoption of internet-based software and applications from both personal and business levels due to the lockdown and social distancing measures, resulting prices of technology stocks have been pushed higher until now.
Returns of Jitta Ranking Top 30 in 2020
Jitta Ranking Top 30 also performed well in 11 stock markets last year as you can see the above bar chart.
- Jitta Ranking Top 30 made positive returns in 11 from 13 markets, making up 85% of all markets that Jitta covered.
- The average return of Jitta Ranking Top 30 in 13 markets was 18.18% last year.
- The top performance of Jitta Ranking Top 30 went to Singapore, gaining 98.40% in 2020.
- The last performance of Jitta Ranking Top 30 went to the United States with a negative return of 4.28%.
Returns of Jitta Ranking Top 30 in 2020 were in line with movement of stock indices worldwide and came with positive returns amid the Covid-19 pandemic.
We give comparisons between Jitta Ranking Top 30 and stock indices in 2020.
When we compared returns of Jitta Ranking Top 30 and stock indices of each market last year, you can see Jitta Ranking Top 30 could overcome stock indices, making up 62% or 8 from 13 markets.
- Jitta Ranking Top 30 won stock indices in Singapore, India, Vietnam, Canada, Hong Kong, Australia, Thailand and the United Kingdom.
- Stock indices won Jitta Ranking Top 30 in China, Japan, Taiwan, Germany and the United States.
- Singapore performed as the highest return of 98.40% last year while STI index made a negative turn of 11.76%, so Jitta Ranking Top 30 overcame 110.16%.
- S&P 500 of the United States made a positive return of 16.26% while Jitta Ranking performed a negative return of 4.28%, so the ranking was defeated 20.54%.
- Returns of Jitta Ranking Top 30 in 13 stock markets stood at 18.18%, winning the average return of stock indices at 4.44%, so the ranking won 11.29%.
However, it was just returns of Jitta Ranking Top 30 in a year which is such a short period to consider overall performance of each stock market. While, win or lose results in 2020 can perform differently in the future.
Investment method is more important than the 1-year performance. If you have the sustainable direction, coming with the right method, your portfolio can make a positive return in longer periods – 3, 5 or 10 years.
The right investment method is the most efficient because it can redo whenever stock markets are in upturn or downturn.
Jitta also provides 5-year, 10-year and 12-year returns of Jitta Ranking Top 30 to emphasize whether the right method can overcome stock indices in a long run.
5-year Average Returns of Jitta Ranking Top 30 and Stock Indices
The above bar chart shows that Jitta Ranking Top 30 could win stock markets, making up 77% or 10 from 13 markets in the last 5 years.
- Jitta Ranking Top 30 on 5-year returns won stock indices of Singapore, the United Kingdom, Australia, Japan, India, Canada, Hong Kong, China, Germany and Thailand,
- Stock Indices on 5-year returns won the ranking in Taiwan, the United States and Vietnam.
- Singapore remained the highest 5-year performance for Jitta Ranking Top 30 with the 5-year return of 28.73% per year while STI Index made a negative return of 0.27%, so the ranking won 29%.
- Jitta Ranking Top 30 lost VNI Index of Vietnam in the largest percentage. The ranking made the 5-year return of 9.42% per year while the index showed the return of 13.77% per year.
- Average 5-year returns of Jitta Ranking Top 30 in 13 stock markets stood at 12.65% per year, overcoming 6.63% on 13 stock indices that made 6.02% per year.
10-year Average Returns of Jitta Ranking Top 30 and Stock Indices
When we take a look on historical returns for 10 years, Jitta Ranking Top 30 overcame 12 from 13 markets.
- 12 markets were Singapore, the United Kingdom, India, Australia, Japan, Thailand, Canada, Germany, China, Hong Kong, Vietnam and Taiwan.
- The market that Jitta Ranking Top 30 remains being defeated was the United States.
- Singapore remained the highest 10-year performance for Jitta Ranking Top 30 with the 10-year return of 19.34% per year while STI Index made a negative return of 1.14%, so the ranking won 20.48%.
- Jitta Ranking Top 30 lost slightly 0.31% on S&P 500 Index of the United States.
- Average 10-year returns of Jitta Ranking Top 30 in 13 stock markets stood at 14.51% per year, overcoming 9.80% on 13 stock indices that made 4.71% per year.
It indicates that Jitta Ranking Top 30 on 10-year performance can win stock indices overwhelmingly, except for the United State that the ranking made the 10-year return close to the index.
For the United States, the stock indices have risen significantly over the past 10 years thanks to new listed companies in the technology sector. They made an IPO (initial public offering) largely on Nasdaq, then stock prices have skyrocketed due to a large number of technology users.
When a valuation of technology companies becomes higher, they have been put into S&P 500 Index and brought this index to increase sharply as well.
Jitta algorithm remains in our value investing direction – to buy a wonderful company at a fair price, so selected stocks into Jitta Ranking Top 30 are a few of technology companies and the stock valuation is not as high as their prices.
But the 10-year return of Jitta Ranking Top 30 for the United States could lose S&P 500 Index slightly.
As a result, the investment method of ‘to buy a wonderful company with a fair price’ can make satisfactory returns in a long run when compared with stock indices.
12-year Average Returns of Jitta Ranking Top 30 and Stock Indices
We take a look back to 2009 – the year to begin backtesting of Jitta Ranking Top 30. You can find returns under Jitta Ranking could overcome all stock indices. Jitta Ranking Top 30 performed a positive return of 20.04% per year while stock markets made a 7.90% return per year during 2009-2020, so Jitta Ranking won 12.13%.
- Jitta Ranking Top 30 made the 12-year highest average return for India with a 33.41% positive return while NIFTY50 Index showed a 13.82% return, so Jitta won 19.60%.
- Jitta Ranking Top 30 performed the 12-year lowest average return for Canada with 12.00% positive return while TSX Index showed 5.68% return, so Jitta won 7.31%.
- The largest gap that Jitta Ranking won the stock index went to the United Kingdom with a 22.59% return. The ranking made a 25.78% positive return per year while FTSE100 showed a 3.19% return.
- The smallest gap that Jitta Ranking won the stock market went to the United States with a 2.35% return. The ranking made a 14.96% positive return per year while S&P 500 Index showed a 12.61% return.
The returns in 5, 10 and 12 years from stock markets can proof significantly that the longer you invest through Jitta Ranking Top 30, the more opportunity you can overcome stock indices.
Moreover, the average returns of Jitta Ranking Top 30 in 10-12 years performed positively, resulting no loss risk on your investment portfolio, particularly by following Jitta Ranking Top 30.
The comparison of stock investment returns is very important and the crucial thing that we want to emphasize is no right strategy can win stock indices every year because the stock investment can come up with both positive and negative factors, especially instability and emotion.
You can choose right and good stocks with fair prices in some years while the stock market also sees valuation of these stocks, you can gain returns, overcoming the markets. If other investors do not see stock valuation that you have chosen and buy other stocks instead, resulting in steep prices, the returns of your stocks may defeat the market.
But stock market emotion can be volatile in a short term, stock prices in a long run can reflect their fundamentals – quality companies with good fundamentals, so you can also overcome the stock index.
12-year Average Returns of Jitta Ranking Top 30 in each country
- Jitta Ranking Top 30 could win SET50 Index 9 years during 2009-2020.
- Jitta Ranking Top 30 could overcome for 8 consecutive years during 2009-2016 while the ranking was back to win in 2020.
- Jitta Ranking Top 30 defeated SET50 Index for 3 straight years during 2017-2018.
As we mentioned that it was not surprising if returns of Jitta Ranking Top 30 lose stock indices in 2020 because the ranking could win markets previously. It could be acceptable to defeat stock indices in some years.
Moreover, we have noticed that returns of Jitta Ranking Top 30 would win markets soon and the ranking made it as expected in 2020 with a large gap of 20.34%.
The United States, Hong Kong and Germany
Similar to SET50 Index, Jitta Ranking Top 30 against S&P 500, HSI and DAXK came with win-and-loss patterns – 9 wins and 3 loses during 2009-2020.
For SIngapore, Jitta Ranking Top 30 made the highest return in 2020 with a 98.40% positive return, compared to STI Index that defeated a large gap of 110.61%. We also provide other 12-year historical data for Jitta Ranking Top 30 and STI Index.
- Jitta Ranking Top 30 made all-time high in 12 years with a 109.21% positive return in 2009.
- Returns of Jitta Ranking Top 30 won the market 11 years and lost only in 2018.
- Singapore was ranked the second place that Jitta Ranking Top 30 performed the highest historical returns
The United Kingdom
The first place that Jitta Ranking Top 30 performed the highest historical returns went to the United Kingdom with a 12-year average return of 25.78%, overcoming FTSE 100 at 22.59%.
- The United Kingdom is the only one market that Jitta Ranking Top 30 performed wins 12 consecutive years.
- The highest return that Jitta Ranking Top 30 performed was at a positive return of 77.95% in 2009.
- The lowest return that Jitta Ranking Top 30 performed was at a negative return of 4.43% in 2011.
- Jitta Ranking Top 30 made a negative return only in 2011 while FTSE Index showed a negative return for 5 years, including 2020.
However, it is an exception that returns of Jitta Ranking Top 30 won for the United Kingdom and it can not guarantee that the ranking can perform wins in the future.
As you can see, stock markets can move up and down, no exception for Jitta Ranking Top 30 as well. This is the nature of stock investment.
If you invested in line with Jitta Ranking Top 30 against FTSE 100 over the past 12 years, you need to have realistic expectations that your portfolio may make losses in some years; meanwhile, you need to be careful and adjust your investment disciplinarily in order to follow a long-term investment direction.
The Covid-19 pandemic made the stock market crash worldwide last year, but a 10-20% drop could happen and these decreasing levels were not in crisis, as you saw rebounds in the second half of 2020.
Jitta Ranking Top 30 reflected returns significantly with positive returns in most stock markets. We have a main purpose that the value investment method can help you to pass all fluctuations and inconsistencies in stock markets.
You will see your portfolio moving up and down in line with situations, but your portfolio can be stable and grow in line with stocks that you have invested in a long run. The longer you invest on Jitta Ranking Top 30 and the more opportunity you can win the stock markets.
If you are interested in the investment of Jitta Ranking Top 30, you can see stock lists of 13 markets – free of charge, just click and log in on https://www.jitta.com/, choose countries that you are interested in and buy stocks on the lists that Jitta has ordered.
Jitta hopes that 2021 will be the better year of stock investment and the Covid-19 pandemic will ease up after vaccines are distributed worldwide.