3 DGR Portfolio: Off To A Great Start

The redemption year is on!

Not Your Average May

You’ve probably heard the old investing phrase: “Sell in May and go away.” It’s based on the idea that the stock market tends to underperform between May and October. But so far in 2025, that advice hasn’t aged well.

After the whole “tariff on, tariff off” drama in April, paired with the so called "liberation day" headlines, a lot of investors threw in the towel. Many figured the rest of the year would be a bust. But as we’ve seen time and time again, the market has a funny way of bouncing back just when you least expect it. Sure, sitting on the sidelines might help you avoid a sell off, but it also means missing the rebound. And trying to time both? Good luck with that, especially in this kind of volatility.

That’s why I prefer to focus on being invested in quality stocks rather than stressing over perfect timing. My strategy doesn’t win every month, but when it hits, it hits hard. And May was one of those months.

3 DGR Portfolio – Year 2 Starts with a Bang

We’re calling this the redemption year because, well, Year 1 wasn’t exactly a victory lap. As I mentioned in my recent update, the 3 DGR Portfolio underperformed the S&P 500 by 6.82% from May 2024 to April 2025. Not ideal.

But May gave us a much-needed boost.

May Performance

The portfolio returned +9.82% in May, compared to the S&P 500’s +6.29%. That’s an outperformance of +3.53%.

Even better? 18 out of 20 stocks in the portfolio ended the month in the green.

Here they are, ranked from best to worst:

• WING 0.00%↑ +29.59%

• IPAR 0.00%↑ +24.74%

• NVDA 0.00%↑ +24.06%

• UI 0.00%↑ +21.26%

• MSFT 0.00%↑ +16.68%

• OLED 0.00%↑ +14.10%

• LRCX 0.00%↑ +12.72%

• BMI 0.00%↑ +12.57%

• MPWR 0.00%↑ +11.60%

• KLAC 0.00%↑ +7.97%

• ZTS 0.00%↑ +7.82%

• HLI 0.00%↑ +7.77%

• MA 0.00%↑ +6.85%

• WDFC 0.00%↑ +6.69%

• ODFL 0.00%↑ +4.50%

• MSCI 0.00%↑ +3.79%

• RMD 0.00%↑ +3.69%

• ROL 0.00%↑ +0.51%

• QCOM 0.00%↑ -2.20%

• BAH 0.00%↑ -11.47%

The average return across all positions was +10.16%. That said, some real world execution hiccups meant the actual portfolio didn’t quite capture all of that upside, but it was still a strong showing.

Early June Snapshot

So far, June’s off to a solid start too. As of June 6th:

• Portfolio: +2.78%

• S&P 500: +1.54%

That puts Year 2’s cumulative return at:

• 3 DGR Portfolio: +12.88%

• S&P 500: +7.93%

• Outperformance: +4.95%

Zooming out, the total return since inception now stands at:

• 3 DGR Portfolio: +18.84%

• S&P 500: +20.98%

So while it’s great to see early signs of a comeback, we’ve still got a bit of ground to make up. And of course it’s only been five weeks. This early momentum can fade just as fast as it appeared. Still, it’s a promising start.

Year 2 Changes Paying Off

The tweaks I made for Year 2 are already proving worthwhile. Broadening the focus beyond just Free Cash Flow Yield to also include valuation and return potential feels like a meaningful upgrade.

I’m genuinely excited to see how the strategy performs this year and over the long haul. For those of you following this journey, I hope you’re enjoying the ride as much as I am.

Here’s to more wins ahead.

Links

Year 2 selections and full dataset

Year 1 detailed performance review

Laying the groundwork for Year 2