The American Association of Individual Investors (AAII) Shadow Stocks portfolio is a stock-picking method that focuses on smaller stocks with the potential to grow big. They call them "shadow stocks" because they're in the shadows of the stock market, and most investors don't pay attention to them. They claim that it has an annual return of 18% over the past 10 years (vs 2.5% for the S&P 500). The rules of how they determine the stocks include one which states that no foreign stocks should be purchased.

Being Canadian, if one were to follow their rules to the letter, their stock picks cannot be used at all, since by definition all of them will be foreign. I therefore decided to follow their rules and come up with my own list of shadow stocks for the Canadian market, which I will be tracking on this website.

I'll start with February 2012, with a hypothetical $10,000 invested in 10 stocks. I will update the performance on a monthly basis, and review the portfolio quarterly.