The authors go on further to drill down the best five stocks among this group of 22, along with explanations as to why.
|Bristol Myers Squibb (BMY)|
|Coca Cola (KO)|
|Microsoft Corporation (MSFT)|
|Northrop Grumman (NOC)|
|Becton Dickinson (BDX))|
We entered these funds into our system and then compared them with a balanced portfolio of dividend producing ETFs as well as the original 22 stock portfolio..
Fund in the 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)|
We would hope to retain most of the returns while losing some of the heart stopping volatility.
- Top 5 Stocks Good Enough For Buffett And Lynch -- Total of $10K invested equally in each stock
- 22 Stocks Good Enough For Buffett And Lynch -- 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)
|22 Stocks Good Enough For Buffett And Lynch||22%||125%||-5%||-15%||12%||37%|
|Top 5 Stocks Good Enough For Buffett And Lynch||18%||140%||5%||22%||7%||31%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||18%||179%||4%||17%||5%||24%|
|Retirement Income ETFs Tactical Asset Allocation Moderate||14%||146%||10%||78%||11%||75%|
Three Month Chart
The more detailed analysis and graphs show the volatility of the stock portfolios.
This is an interesting outcome. We see the volatility drop nicely even though we lose returns. We can see that these stocks perform better than the buy and hold ETF portfolio being compared. This has the benefit of being lazier -- no change was made to the portfolio compared to monthly rebalancing of the ETF portfolio and the results are slightly higher.
We will track both of these portfolios and report on how they navigate the current set of choppy conditions.
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.
Disclosure: Author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.