Alex Pape of the Motley Fool offers three stocks in his personal brokerage account. He is not alone with his recommendations because all three stocks are owned and recommended by Motley Fool Million Dollar Portfolio, the Fool's real-money investing service. His selections:
- Bridgepoint Education (NYSE:BPI) is an online, for-profit educator
- Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) needs no introduction
- Retail Opportunity Investments (NASDAQ:ROIC) buys up and turns around distressed commercial West Coast real estate
This gives you one stock in a potentially growing market (education) as existing providers are straining at the seams and people look for new solutions. There is a solid investment with Berkshire Hathaway and an interesting real estate place. Three stocks is a very small selection but worth comparing with our ETF benchmark of a balanced portfolio of dividend producing ETFs.
|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)|
- 3 Stocks Owned By a Fool -- 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 Performance Comparison
|Portfolio/Fund Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Retirement Income ETFs Tactical Asset Allocation Moderate||-4%||-39%||9%||69%||8%||53%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||-0%||-3%||12%||63%||3%||11%|
|3 Stocks Owned By a Fool||16%||62%|
The first thing to note is that this is only three stocks and so there will be a good deal of volatility and this would need to be augmented with other equities to make a stable portfolio. The second thing to note is that the history is not long enough to take a long term view.
The more detailed analysis and graphs give you a visual view of the volatility.
We can see the volatility because there are only three choices but the performance is intriguing and worth tracking along with more examples of equities that have the same properties.
This selection of equities had a very strong spike around 2008 and perhaps they will spike again. We will track this selection but this isn't something I would want to own.
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.