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Portfolio Information
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Our Track Record -
See the results for your self!
Model Portfolio -
An inside look at how we do it.
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Free update on recent split activity.
Portfolio Management -
Learn to create a successful portfolio.
Sample Newsletter -
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Subscription Information
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Sign up today for just $20 a month!
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Frequently Asked Questions:
The most common question about 2 for 1 is "What are your results?" Since inception, the 2 for 1 portfolio has returned over 9.1% annualized, well over two times the retun of the S&P 500 (4.0%). This is a real portfolio of real stocks in the author's own IRA account. The monthly newsletter describes, in detail, how the 2 for 1 strategy works, so you can duplicate these results with only a few minutes of effort each month.
Other common questions include:
- How does the Hulbert Financial Digest rank 2 for 1?
- What's so special about stocks that have split?
- What is "laddering"?
- Why not 3 for 2 splits?
- Have you really beaten the market for ten of the last fourteen years?
- If you're so smart how come you're not rich?
- What qualifies Neil Macneale to give investment advice?
- The 2 for 1 procedure is kind of boring!
- How can I use the 2 for 1 procedure if I'm just getting started?
- Is 2 for 1 guaranteed?
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The Hulbert Financial Digest began covering 2 for 1 in October, 2000. Mark Hulbert’s Long Term Performance Ratings are out for the end of 2009. Hulbert has tracked 2 for 1 for almost ten years and, over that period he calculates a 0.0% return for the Wilshire 5000 (the broad market) and an annualized 7.5% return for 2 for 1. On a risk adjusted basis, 2 for 1 was also well ahead of the market. Hulbert has tracked 99 newsletter publishers for as long or longer than he has tracked 2 for 1. Of those, only 40 have portfolios that, when averaged, have beaten the market since inception. Of those only three have beaten the market by a wider margin than 2 for 1. Of those, all achieve their results with more risk, i.e. more volatility, than 2 for 1. Read what Mark Hulbert has to say about stock splits and the 2 for 1 newsletter.
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The original idea for the 2 for 1 portfolio and newsletter came from an
article entitled "A Strong Signal" that appeared in the April 22, 1996 of
Forbes magazine. This piece discusses a study undertaken at Rice University
where the performance of stocks split 2 for 1 is measured in relation to
performance of the market as a whole. The final results of the study are
published in the Journal of Financial and Quantitative Analysis and would
indicate that there is a measurable difference in the performance, for up to
three years, of stocks that have split 2 for 1 as opposed to those that have
not.
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Laddering is the technique of regularly buying and selling securities in a
portfolio so as to always maintain a constant number of securities as the
portfolio moves through time. The theory, for 2 for 1, is that our stocks
statistically do better than the market for 2 to 3 years, based on a Rice
University study. We keep 30 stocks in the portfolio (30 months = 2 1/2
years). Each month we sell the oldest "at the top of the ladder" and buy a
new stock to put "at the bottom of the ladder." This procedure eliminates
the problems associated with trying to time the market and agonizing over
when to sell a stock.
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The question is, "Why don't we include stocks that have split 3 for 2 or by
some other formula?" We include 2 for 1 and higher splits (such as 3 for 1), but not 3 for 2 or lower. Our procedure is based on one basic consideration.
The entire 2 for 1 strategy and procedure relies on David Ikenbery's Rice University original study and follow-up study on stock splits. The studies show that the group of stocks that had announced splits had a better overall performance, over two to three years, than a group of similar stocks that had not split.
For our purposes, the number of stocks splitting 2 for 1 or higher is more than enough to provide several good companies to choose from each month. Remember, we only need one! Doing the research and sifting through the 20 to 50 stocks that split 2 for 1 or 3 for 1 each month is time consuming enough. Why would one want to make the list any longer? To this some might say, "but what if the most promising stock splits 3 for 2 instead of 2 for 1?" You can only know this after the fact, and one need only look at the many very successful stocks that we have passed up to realize that our odds would not have improved by simply making the pool we picked from larger. The success of our portfolio does not depend so much on the selection of individual winners as it does on assembling a group of stocks that has a slightly better than even chance of beating the market.
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The 2 for 1 stock picking procedure is based on a proprietary formula tested
on stocks that declared 2 for 1 splits starting in January, 1990. The
portfolio was built on paper, one stock from each month, through July of
1992. At that point, there were 30 stocks in the portfolio (still all on
paper) and this portfolio was tracked through July of 1996, taking the
oldest stock off and adding the newest from each month's list of 2 for 1
splits. All of this work was done during June and July of 1996. At the end
of July '96, the paper portfolio was converted into a real portfolio, using
$50,000 from Neil Macneale's IRA account. The 30 stocks making up the real
portfolio were bought in the same proportion that they existed in the paper
portfolio on that day, 7/31/96. A graph that appears each month on the back
page of the 2 for 1 newsletter represents this combined paper and real 2 for 1
portfolio vs. the S&P 500, with the 2 for 1 portfolio adjusted to equal the
S&P 500 on July 31, 1992. The following table gives the actual year-end
numbers represented by that graph.
Index vs. portfolio 12 mo. change
Dec. 31 S&P 500 2 for 1 S&P 500 2 for 1
1991 417.09 24280 -- --
1992 435.71 27405 4.46% 12.87%
1993 466.45 30506 7.06% 11.31%
1994 459.27 31338 -1.54% 2.73%
1995 615.93 43622 34.11% 39.20%
1996 740.74 54417 20.26% 24.75%
1997 970.43 73871 31.01% 33.91%
1998 1229.22 81587 26.67% 11.96%
1999 1469.25 80776 19.35% -0.99%
2000 1320.28 85953 -10.14% 6.55%
2001 1148.08 87539 -13.04% 1.85%
2002 879.82 70989 -23.37% -18.92%
2003 1111.91 104696 26.38% 47.48%
2004 1211.92 140001 8.99% 33.72%
2005 1248.29 154295 3.00% 10.21%
2006 1418.30 165187 13.62% 7.06%
2007 1385.59 200674 3.53% 21.48%
2008 903.25 114024 -38.49% -43.18%
2009 1115.10 167852 23.45% 47.21%
The 2 for 1 numbers include all dividends and commissions. The S&P 500
numbers do not include either. Dividends are a plus and commissions are
almost an equal minus for this size a portfolio, so we believe this to be
very close to an "apples to apples" comparison.
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I'm trying, I'm trying! This is Neil Macneale answering. If 2 for 1 had been
started 30 years ago, I probably would be rich. The real question is, "Why
are you trying to sell me a newsletter about this system instead of using it
to make money for yourself?" The answer is that I am using the 2 for 1
system and the results are printed in every issue of the newsletter, but the
2 for 1 portfolio is in my retirement account. I sell the newsletter to help pay for the cost of the Internet connections, research reports, and time and effort invested in the newsletter and, at $20.00 per month, no one has accused me of trying to gouge my subscribers.
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Neil Macneale III has qualified as a Registered Investment Advisor in the State of California and with the SEC. Neil Macneale was registered with the SEC but, in 1997, the SEC no longer registered Investment Advisors if they did not actually handle their clients' funds. But more important than formal training or certification, Neil Macneale is only sharing an investment procedure that works for him. It is not for everyone. If subscribers like what they read and follow the 2 for 1 recommendations, they should expect to do no better or no worse than Mr. Macneale does for his own account. The results are what count, not the degrees, certificates, or plaques on the wall.
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You're absolutely right! 2 for 1 is not written for day traders, market
timers, or speculators. If a reader wants to "play" the market, we recommend
they take a sum they can afford to lose and get their excitement trading
with that money. However, for their IRA or kids' college fund, we recommend
a proven long-term strategy that's about as exciting as watching paint dry.
But truthfully, there are actually people who find a 47% return on their
money just a little exciting. (see results for 2003 and 2009 above)
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We do not recommend investing in individual stocks until your account is at a minimum of $10,000. Up until that time we feel that accumulating funds in an indexed mutual fund with a low cost broker such as Vanguard is a more prudent course. Another alternative would be an account holding only Standard & Poors Depository Receipts (SPDRs) which mirror the performance of the S&P 500. After you have over $10,000, then you can slowly begin purchasing individual stocks recommended by 2 for 1, perhaps every two or three months. Finally, when your account is at $30,000 or more, you should own all thirty stocks in the 2 for 1 portfolio. The short answer is that you should never spend less than $1000 on a stock position. Below that level, the commission costs are too large a percentage of each trade. ($20 on a $1000 trade = 2% commission) If you are in the "under $10,000" category, be patient, keep up the automatic payroll deductions to your investment account, follow 2 for 1 on this website, and then subscribe when the time is right.
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Yes! 2 for 1 guarantees that the stock market will go up and it will go down. We guarantee that some other newsletter or mutual fund will do better than we do in any given time period. We guarantee that there are no guarantees in this life. (Except one) We do guarantee your ability to cancel your subscription at any time, for any reason, no questions asked.
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