We recently reviewed five rocket stocks recommended by Jonas Elmerraji from 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: CRR; NFLX; FOSL; TSCO; 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:
- CARBO Ceramics (CRR)
- Netflix, Inc. (NFLX)
- Fossil Inc (FOSL)
- Tractor Supply Company (TSCO)
- Lululemon Athletica inc. (LULU)
On the whole question of whether Apple (AAPL) is a backup or a main engine, another reader stated:
"AAPL really hasn't been my spare, more like a main engine. Although companies may be nipping at their heals I have confidence that Apple will continue to dominate consumer electronics. That, with their customer loyalty, are difficult forces to overcome."
This is a fair point and so we added AAPL and reduced the investments in the other equities in the portfolio. We retain the other comparison portfolios.
1. The Fool's Matt Koppenheffer's 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, trade at reasonable valuations.
Company | Dividend Yield |
|---|---|
| Johnson & Johnson (JNJ) | 3.4% |
| McDonald's (MCD) | 3% |
| Kimberly-Clark (KMB) | 4.1% |
| Sysco (SYY) | 3.3% |
| Mattel (MAT) | 3.5% |
2. ETF dividend portfolio benchmark:
Asset | Fund in portfolio |
|---|---|
| REAL ESTATE | ICF (iShares Cohen & Steers Realty Majors) |
| CASH | CASH |
| 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
- 2 SA Readers 5 Rocket Stocks -- 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% | ||
| 2 SA Readers 5 Rocket Stocks | 158% | 554% | 75% | 198% | ||
| Fool's 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% |
Three Month Chart
click to enlarge
One Year Chart
Three Year Chart
Five Year Chart
The addition of AAPL has increased returns and also boosted the Sharpe ratio indicating that you are getting better risk adjusted returns. There is no question that Apple continues to perform admirably and there is every expectation that it will continue to do so -- with the one proviso that the high tech business is fickle and that remaining on top is very challenging in this market segment.
Thanks to the readers for their comments and we will keep tracking this to see where it goes.
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: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
