We recently reviewed five rocket stocks recommended by Jonas Elmerraji at Thestreet.com. He searches for companies with short-term gain catalysts and longer-term growth potential and his picks were.
One SeekingAlpha reader who works in the financial services industry in the Northeast and has a fascination with capital preservation, fixed fractional trading, and trading systems made the following comment:
If a jumbo jet could be classified as a rocket, your five would fly. Rockets blast of with short spurts of real energy. Rocket stocks must have a bundle of market power behind them and exceed analysts dreams. For those I'd choose real growth stocks: Carbo Ceramics (CRR); Netflix (NFLX); Fossil (FOSL); Tractor Supply (TSCO); Lululemon (LULU). Then I'd keep AAPL in reserve as a spare.
Wisdom being derived from the counsel of many, we will enter his portfolio and make a comparison with the Street.com and our other three reference portfolios.
This is a diversified set of companies that should provide an interesting comparison.
1. The Fool's Matt Koppenheffer selection of what he considered five stocks for long term dividend performance. All five have dividend yields well in excess of the S&P's and trade at reasonable valuations.
|Johnson & Johnson (JNJ)||3.4%|
2. ETF dividend portfolio benchmark:
|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)|
- SA Reader 5 Rocket Stocks -- Total of $10K invested equally in each stock
- Street's 5 Rocket Stocks to Grab Gains in July -- Total of $10K invested equally in each stock
- Fool's 5 Dividend Payers to Save your Portfolio -- 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|
|SA Reader 5 Rocket Stocks||175%||566%||83%||207%|
|Streets 5 Rocket Stocks to Grab Gains in July||36%||214%||22%||62%||31%||93%|
|Fools 5 Dividend Payers to Save your Portfolio||24%||235%||14%||68%||14%||69%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||19%||221%||6%||31%||6%||26%|
|Retirement Income ETFs Tactical Asset Allocation Moderate||16%||186%||12%||94%||11%||80%|
[Click all to enlarge] One-Year Chart Three-Year Chart In this comparison, we have been using the dividend payer from the Fool as a well-performing stock portfolio along with the ETF portfolios as baseline comparisons. We can see why the reader said that the Street's rocket was a jumbo and to look for larger growth stocks to provide the additional boost. What is interesting is that for as long as we can track the portfolios, the rocket keeps on going and isn't petering out.
Thanks to the reader for his suggestions and we will keep tracking this to see where it goes.