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We continue to examine stock portfolio recommendations from luminary publications to see whether we can mix ETFs and equities to create a portfolio with good risk/return properties that is easy to live with for the long term investor.

The Fool's Matt Koppenheffer approach is not to simply grab the biggest yields available. He wants to look back 30 years from now at the long-term returns. In addition to worthwhile yields, he wants quality companies that we can expect to be around 30 years from now.

With that in mind, here are five stocks that fit the bill. All five have dividend yields well in excess of the S&P's, trade at reasonable valuations. All of these businesses have what it takes to continue to succeed for decades to come.

His selections are:


Dividend Yield

Johnson & Johnson (JNJ) 3.4%
McDonald's (MCD) 3%
Kimberly-Clark (KMB) 4.1%
Sysco (SYY) 3.3%
Mattel (MAT) 3.5%

We compare this with two of our highest performing portfolios

Asset Fund in this portfolio
REAL ESTATE ICF (iShares Cohen & Steers Realty Majors)
FIXED INCOME TIP (iShares Barclays TIPS Bond)
Emerging Market VWO (Vanguard Emerging Markets Stock ETF)
US EQUITY DVY (iShares Dow Jones Select Dividend Index)
US EQUITY VIG (Vanguard Dividend Appreciation ETF)
INTERNATIONAL EQUITY IDV (iShares Dow Jones Intl Select Div Idx)
High Yield Bond HYG (iShares iBoxx $ High Yield Corporate Bd)
INTERNATIONAL BONDS EMB (iShares JPMorgan USD Emerg Markets Bond)

Portfolio Performance Comparison

Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Most Popular Stock Portfolio 42% 274% 18% 75% 16% 73%
Fools 5 Dividend Payers to Save your Portfolio 23% 197% 11% 54% 13% 65%
Retirement Income ETFs Strategic Asset Allocation Moderate 21% 208% 3% 14% 6% 25%
10 Dividend Stocks From SeekingAlpha Readers 21% 160% 7% 30% 10% 51%
Retirement Income ETFs Tactical Asset Allocation Moderate 15% 152% 9% 71% 11% 72%

The more detailed analysis and graphs show the volatility of the stock portfolio which has performed well as far as the back testing allows as some of the stocks have only a four year life.

Three Month Chart
(Click to enlarge)

Five Year Chart
(Click to enlarge)

All of these portfolios have solid stocks and they all perform well. the most popular stock still has the highest performance and we will shortly review the list of most popular based on the new portfolios we have examined.

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.