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In my previous article in this series (review part 2 here), I outlined 6 stocks that, when purchased on November 23, 2011 or added to existing positions, could enhance our retirement portfolio through additional shares at lower prices by buying on the dips. We could also tweak our yields a bit with these additional shares as well.

Here, in part 3 of this ongoing portfolio strategy, I have added stocks that readers have asked to be added. I feel that this portfolio could be a superior way of securing a safer, long term, steady stream of income for retirement, or reinvested for even further future gains.

In this way, a diversified portfolio of well managed, large cap, blue chip, dividend paying stocks could potentially last a lifetime. It could produce income to pay bills, dividends reinvested to own more shares of each stock, or additional funds to purchase other stocks for various purposes.

There are so many good solid stocks right now to build a portfolio with that fits these goals that I needed to shorten the list by using some basic criteria.

Basic Requirements For Our Portfolio

  1. Large cap, blue chip companies
  2. Well-financed with very large cash reserves
  3. A history of regularly meeting or beating earnings estimates at least 90% of the time
  4. A history of consistent dividend payments over the last 5-10 years at least (with very few exceptions)
  5. A history of dividend increases over a period of 5-10 years (with very few exceptions)
  6. A minimum yield of 3.00% annually (with one exception)
  7. An ESS rating of neutral, bullish or very bullish, no exceptions
  8. Very limited overlap while being extremely well diversified

I realize that there are many portfolio possibilities to work with, but in doing some advanced research as well as using my own opinions, I have come up with a portfolio of 17 stocks that I feel can offer all of the above, as well as a very good chance for strong capital appreciation.

I know that I have not included every stock that everyone requested, but we can always make changes within our portfolio as trends and outlooks change for any of the stocks we will follow.

The companies are; ExxonMobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), AT&T (NYSE:T), General Electric (NYSE:GE), Annaly Capital Management (NYSE:NLY), Exelon (NYSE:EXC), Procter & Gamble (NYSE:PG), McDonald's (NYSE:MCD), Philip Morris International (NYSE:PM), Intel (NASDAQ:INTC), Realty Income (NYSE:O), ConocoPhillips (NYSE:COP), Pfizer (NYSE:PFE), Chevron (NYSE:CVX), E. I. du Pont (NYSE:DD), Duke Energy (NYSE:DUK), PPL Corp. (NYSE:PPL).

Each of these stocks is a wonderful buy right now, and can achieve the goals that we seek, whether it is for income, capital appreciation, reduced risk investing, or for our future retirement needs.

Our Retirement Strategy Portfolio As Of 11/23/2011

Stock

23-Nov

30-Nov

%Gain

Div. Yield

Shrs Held

XOM

75/SHR

80/SHR

6.50%

2.80%

100

JNJ

62/SHR

65/SHR

4.70%

3.60%

100

T

27/SHR

29/SHR

7.20%

6.00%

100

GE

15/SHR

16/SHR

6.20%

3.85%

100

NLY

16/SHR

16/SHR

0%

15.00%

110

EXC

41/SHR

44/SHR

7.00%

4.90%

400

PG

61/SHR

64/SHR

5.00%

3.40%

100

MCD

92/SHR

95/SHR

3.00%

3.00%

100

PM

71/SHR

76/SHR

6.70%

4.10%

140

INTC

23/SHR

25/SHR

9.70%

3.50%

100

O

32/SHR

34/SHR

6.10%

5.20%

100

COP

67/SHR

71/SHR

7.50%

3.80%

100

PFE

18/SHR

20/SHR

10.00%

4.10%

100

CVX

94/SHR

103/SHR

9.90%

3.50%

100

DD

44/SHR

48/SHR

8.75%

3.75%

100

DUK

20/SHR

21/SHR

5.00%

4.80%

100

PPL

28/SHR

30/SHR

6.75%

4.80%

100

Actions To Take Now

  1. Using an investable amount of $100,000 dollars, purchase shares of each of these stocks (either for real or just to track our success, in whatever way you choose) on a share allocation basis. (The shares owned keep the percentage allocation between 1% and 9% in any given stock, aside from my own personal opinion of holding more EXC and PM on a percentage basis.)
  2. Monitor the stocks on a regular basis by following their earnings, any news reports, analyst upgrades or downgrades, unusual events, and global economic trends. (A service such as Seeking Alpha e-mail alerts will send everything directly to your email on a very regular up to date basis, as well as any articles written by the fine authors we have. Signing up is free of charge as well as having all of the alerts e-mailed to you)
  3. Begin to look at the options charts for each stock so that we may implement our options strategy for even greater returns, and/or volatility hedges.
  4. Continue to do your homework on each stock to make certain you are comfortable owning it.

Tracking Our Performance

Whether we simply place these stocks in a practice portfolio or an actual portfolio, I will track the stocks on a regular basis. The next articles written will have a quick review of the progress or lack of any, as well as an in depth look at several of the stocks in each article. In this way, we can work together, monitor our performance, and discuss various ways to increase the value of our portfolio as well as the stocks we hold. (By the way, this portfolio looks VERY similar to my own!)

By having an ongoing dialogue, with crisp, pertinent commentary, we will begin to approach our main objective of “Retirement Alpha”.

My Opinion

When folks ask me why I invest in individual stocks, and not mutual funds, the answer becomes crystal clear when an exercise such as this is done. I am in control of my finances, not an unknown manager of a fund whose interests are within the stated goals of that fund or the investment firm behind them. While mutual funds are fine, I am much more comfortable knowing what I am doing with each stock held on a regular basis. A mutual fund announces to me after the fact, what changes have been made, what stocks have been bought or sold, and I have absolutely no input whatsoever.

I feel strongly, that as individual investors, we should manage our own portfolio with the knowledge gained and learned from our research and personal goals and needs.

With a well diversified, well balanced, dividend producing portfolio such as the one we have here, we can achieve our goals and meet our needs, for a lifetime.

*Please remember that this article is not a recommendation to buy any or all of these stocks and that you should always do your own research to determine what type of portfolio is right for your individual needs.

Disclosure: I am long XOM, JNJ, T, GE, NLY, EXC, INTC, O, DUK, PM. I might be adding the remaining stocks to my personal portfolio prior to the end of the year.

Source: Retirement Strategy: Buy On Dips, Add To Core Holdings (Part 3)