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In a previous article, "2012 Retirement Portfolio Planning: Stocks To Consider For Next Year," I outlined a portfolio structure based on age correlated demographics. It is time to take a retrospective look back at the portfolio and use current performance to back-test the thesis. It is good portfolio management practice to systematically review performance and retest a thesis.

Portfolio


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Novartis (NVS)

Novartis is a global pharmaceutical and device manufacturer that engages in the research, development, manufacture, and marketing of a range of healthcare products worldwide. Its Pharmaceuticals division offers patented prescription medicines in various therapeutic areas, including oncology; primary care and established medicines; specialty care, such as ophthalmology, neuroscience, integrated hospital care, and critical care; and cardiovascular and metabolism, respiratory, and other medicines.

Portfolio entry price $54.94 Current price $74.04 increase of 34.77%

Entry Yield 4.2% current yield 3.4%

Luxottica (LUX)

Luxottica Group together with its subsidiaries, provides luxury and sports eyewear worldwide. The company operates in two segments, Manufacturing and Wholesale Distribution, and Retail Distribution. The Manufacturing and Wholesale Distribution segment engages in the design, manufacture, wholesale distribution, and marketing of house brand and designer lines of prescription frames and sunglasses; sports eyewear products; and men's and women's apparel, footwear, and accessories.

Portfolio entry price was $27.76. Current price is $53.04 representing a 91.07% change. Starting dividend yield was 2.12%. Current yield is 1.10%

Sysco (SYY)

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of a range of food and related products primarily to the foodservice or food-away-from-home industry.

Portfolio entry price was $27.56. Current price is $34.83 representing a 26.38% gain. Dividend yield at purchase was 3.7% current yield is 3.2%

Genuine Parts (GPC)

Genuine Parts Company distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, the Dominican Republic, Mexico, and Canada.

Portfolio entry price was $55.86 with a yield of 3.07%. Current pricing is $81.41 representing a 43.18% gain. Current yield is 2.6%

Costco (COST)

Costco Wholesale Corporation engages in the operation of membership warehouses. The company offers branded and private-label products in a range of merchandise categories. As of November 28, 2012, the company operated 618 warehouses, including 447 in the United States and Puerto Rico, 84 in Canada, 32 in Mexico, 22 in the United Kingdom, 13 in Japan, 9 in Taiwan, 8 in South Korea, and 3 in Australia.

Entry price was $83.26 and dividend yield was 1.13%. Currently Costco is priced at $114.58 representing a 37.62% gain with a current dividend yield of 1.1%.

Summary:

Historical performance of the target portfolio significantly outperformed the market posting a 42.94% increase over the initial investment. In reviewing the thesis I do not see any current circumstances that necessitate an adjustment to the thesis, or portfolio structure. With gains as substantial as these I do not anticipate similar performance through 2014 although the dividend yield will help to support portfolio profitability. The stocks selected all have dividend yields adding further to their performance. Including dividends at the current rates the portfolio increases 45.98%. Based on the change in stock price the portfolio has been quite successful. It is diversified and somewhat defensive.

Source: Dividends Demographics And Target Portfolio Performance