Team Alpha Retirement Portfolio: Now Is The Time To Buy This Dip!

Includes: CVX, INTC, MCD, O, XOM
by: Regarded Solutions

Last Thursday I wrote this article about taking advantage of the dilly-dallying by our government that has caused just about every stock within our Team Alpha Retirement Portfolio to stumble.

It appears that fear has finally caused a correction in which many of our "hold forever" stocks have now become solid buys.

Currently, the Team Alpha Retirement Portfolio consists of Apple (NASDAQ:AAPL), AT&T (NYSE:T) BlackRock Kelso Capital (NASDAQ:BKCC), Cisco (NASDAQ:CSCO), CSX Corp. (NYSE:CSX), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Ford (NYSE:F), General Electric (NYSE:GE), Intel (NASDAQ:INTC), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), McDonald's (NYSE:MCD), Newmont Mining (NYSE:NEM), Procter & Gamble (NYSE:PG), Realty Income (NYSE:O), and Wells Fargo (NYSE:WFC).

Our Shopping List

As noted in my previous article, I have been watching a handful of mega cap, blue chip stocks during this self inflicted crisis to add more shares to our holdings. Buying the dips and adding to the core is a central theme in successful investing.

Here is the current "blue light special" list:

  • CSX, Inc.:
  • Chevron:
  • Exxon Mobil:
  • General Electric:
  • Johnson & Johnson:
  • Coca Cola:
  • McDonald's:
  • Procter & Gamble:
  • Realty Income:

Now, here are the prices of each of the stocks within this portfolio, as of last month's update:

Stock #Shares 9/27/2013 TotValue Orig. Price
XOM 100 87/shr 8700 75
JNJ 105 87/shr 9135 63
T 400 34/shr 13600 28
GE 500 24/shr 12000 15
BKCC 500 10/shr 5000 10
AAPL 20 483/shr 9660 436
PG 100 77/shr 7700 61
KO 100 38/shr 3800 34
NEM 200 28/shr 5600 33
WFC 200 42/shr 8400 40
O 240 41/shr 9840 34
CSCO 400 24/shr 9600 18
CVX 55 123/shr 6795 116
MCD 100 97/shr 9700 86
CSX 200 26/shr 5200 19
F 300 17/shr 5100 13
INTC 200 23/shr 4600 24
Cash Rsvs x x 7791
Tot Value x x 142221
Click to enlarge

Our target stocks to add have dipped to the point where NOW is a good time to buy, and so we will. It is also time for me to dump a loser.

Actions I will Take Now

With the cash reserves we currently have, I will be buying 25 shares of XOM at roughly $85.00/share for $2,125, 60 shares of O at about $39.00/share for $2,340, 10 shares of MCD at about $93.00/share for $930, and finally, 10 shares of CVX at about $116.00/share for $1,116.

This will have deployed roughly $6,600 into what I consider very significant opportunities.

At the same time, I will be dumping all shares of INTC, which shows absolutely no signs of turning around, and has not increased its dividend. This action will raise $4,400 (200 shares at $22.00) to offset the majority of the cost of our purchases.

After all is said and done, we will have added shares in 4 mega cap, blue-chip, dividend winning stocks, unloaded a loser, and still have nearly $6,000 in cash to use if other buying opportunities present themselves.

My Opinion

Taking advantage of the dips to add to our core holdings will eventually pay off in higher income as well as some capital appreciation. While I really hate taking an $800 loss in INTC, the stock has shown me nothing but continued weakness, even in the face of all of their "new products".

By dumping a loser to fund the purchase of several better quality stocks we already own, our portfolio will become stronger over the long term.

Disclaimer: The opinions of this author are not a recommendation to either buy or sell any security. Please do your own research prior to making any investment decisions.

Disclosure: I am long AAPL, BKCC, CSCO, CSX, CVX, F, GE, INTC, JNJ, KO, MCD, NEM, O, T, WFC, XOM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I will be selling INTC as well as adding to positions in O, MCD, XOM, CVX as of market trading on 10/9.