59.31 -0.61 (-1.03%) Sell

LPLA investors dump it for better alternatives

13 min read

LPL FINANCIAL HOLDINGS INC. was among the worst performers on Thursday. It lost -1.03% to close at 59.31. It is currently trading -17% below it's 52 week high of 72.22.

[Themes containing LPLA]

LPLA is currently in a down trend. The current bearish signal has generated a profit of +8.5% for investors in the last three months.


LPLA has been underperforming the SP500 index in recent time, after having outperformed till 22 May, 2018. Over the last 2 years 11 months and 9 days, LPLA outperformed the SP500 index on 50% days. Which indicates that on days LPLA outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

During the last three months LPLA was mostly loss making and delivered on average -0.11% per day. It's best return during this period (of +5.05%) was on Wednesday, 31 Oct, 2018. While it's worst loss in the same period (of -7.22%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 4 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -9.83% losses to investors. This was followed by a bullish trend that started on 25 Oct, 2018 and ended on 8 Nov, 2018. This bullish trend delivered +21.42% to investors.

LPLA had 6 profitable and 6 loss making months over the last year. During the last year, LPLA underperformed SP500 index on monthly return basis. LPLA significantly outperformed SP500 index in May 2018, when it returned +13.54% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. LPLA had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Aug 2018 to Oct 2018) during which period it delivered -6.78%. It is interesting to note that both LPLA and SP500 index significantly outperform during months when quarterly/annual results are announced.

Financial support is one thing, but I always think what becomes really sacrificial is your time.
-- Cliff Richard

LPLA is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in LPLA's volatility from 18 Sep, 2018 to 6 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that LPLA has significant positive skewness in it's return distribution. This indicates that investors can expect LPLA to recover from drawdowns quickly. Which makes LPLA a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than LPLA. Therefore, SP500 must receive a lower allocation than LPLA in your portfolio. LPLA usually has shorter drawdown period than the SP500 index.

Based on your interest in LPLA you may find it interesting to know that AMRH and AYTU have both shown remarkable performance and deserve to be on every investors' watchlist.

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