Many working people put off their retirement investing -- just one more year until it has becomes a "hair on fire" problem. The problem is that we can easily be overwhelmed and shut down. The way to solve this is to focus on what works in the long term -- that is what long term investing is all about -- and allow that to filter out what may work in the short term but won't stand the test of time.
We continue to examine different portfolios to see what we can learn and use to further our investment portfolios.
The reporting of quarterly results is a big deal for U.S. publicly traded companies. How do you know which stocks will give you a nice return on reporting day?
Bespoke Investment Group co-founder Paul Hickey looked at 2,240 stocks and found just nine stocks that have gone up every time earnings day has rolled around since the March 2009 market bottom.
Below are the nine earnings-day winners. Next to each company's name find the upcoming earnings-report date and average single-day percentage gain.
1. Verifone Systems (PAY) - 5/26/2011 - 9.20%
3. MWI Veterinary Supply (MWIV) - 5/6/2011 - 6.27%
4. Opnet Technologies (OPNT) - 5/9/2011 - 5.80%
5. First Cash Financial (FCFS) - 4/20/2011 - 4.24%
6. Raymond James (RJF) - 4/21/2011 - 4.12%
7. Barrick Gold (ABX) - 4/27/2011 - 3.24%
8. Horace Mann Educators (HMN) - 4/28/2011 - 2.61%
9. Anadarko Petroleum (APC) - 5/3/2011 - 1.82%
Source: Bespoke Investment Group.
We entered the nine stocks in a portfolio on our system and started tracking from the end of 2007. This is limited by the age of the youngest equity. We show the current holdings with no rebalancing since the end of 2007.
For many, 2007 is just not long enough to have gone through enough of the "slings and arrows of outrageous fortune" that the market throws at a portfolio to come to any conclusion. However, we will continue to track these portfolios and, as time marches on, we will get a better perspective.
The comparison comes from a previous article:
- Coca Cola (KO)
- PepsiCo Inc (PEP)
- Johnson Johnson (JNJ)
- Wal-Mart (WMT)
- Altria Group (MO)
- McDonald's Corp. (MCD)
- Proctor and Gamble (PG)
- Abbott Labs (ABT)
- British Alcohol and Tobacco (BTI)
- JPMorgan Chase & Co (JPM)
We compare this with our benchmark six asset ETF portfolio.
|LARGE BLEND||VTI||Vanguard Total Stock Market ETF|
|Foreign Large Blend||VEU||Vanguard FTSE All-World ex-US ETF|
|DIVERSIFIED EMERGING MKTS||VWO||Vanguard Emerging Markets Stock ETF|
|REAL ESTATE||VNQ||Vanguard REIT Index ETF|
|COMMODITIES BROAD BASKET||DBC||PowerShares DB Commodity Idx Trking Fund|
|Intermediate-Term Bond||BND||Vanguard Total Bond Market ETF|
The comparison is:
- 9 Stocks That Gain Every Earnings Day -- Total of $10K invested equally in each stock
- 10 Dividend Stocks From SeekingAlpha Readers -- Total of $10K invested equally in each stock
- Retirement Income ETFs Tactical Asset Allocation Moderate -- Above funds using TAA (40% fixed income, 30% for each of the top two asset classes)
- Retirement Income ETFs Strategic Asset Allocation Moderate -- Above funds using SAA (40% fixed income, 12% for each of the five asset classes -- funds selected based on price momentum)
|Portfolio/Fund Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|P 10 Dividend Stocks From SeekingAlpha Readers||16%||99%||6%||27%||11%||52%|
|P 9 Stocks That Gain Every Earnings Day||92%||332%||38%||101%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||14%||96%||3%||16%||5%||23%|
|Retirement Income ETFs Tactical Asset Allocation Moderate||9%||52%||10%||76%||10%||66%|
This is certainly a selection of equities that have performed very well, especially as the market bounced back in 2010 and up until today.
For those looking at long term ownership, there is going to be considerable (justified) skepticism that the returns of the newer portfolio are sustainable and what happens when events turn sour. In addition, in the Full Data you will be able to see the drawdown and see that while performance is good, the drawdown is the highest, meaning it could be an uncomfortable ride.
It is important to state that there is no implied recommendation of this portfolio, merely a reporting of simulated returns of a portfolio recommended by Bespoke Investment group with whom we have no affiliation and have had no contact.
It does beg the question as to whether, for those so inclined, it may be worth dedicating part of a portfolio to investments that need more careful attention but can give higher returns.
We will keep tracking this set of equities to see how they perform going forward.
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.