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Recently, we have been working with a client who is looking to minimize his overall portfolio risk. After careful deliberation, and some math, we have decided to go with the portfolio shown below.

This portfolio is comprised of mostly large-cap companies with steady dividends and one bond ETF. We are not fixed-income experts and don't pretend to be; therefore, we have been recommending this ETF for investors looking for some fixed-income exposure. Investors should note that the net expense on the ETF is approximately 1.5%. This portfolio achieves a dividend yield of nearly 5% with significantly less risk, comparatively speaking, to most investments yielding the same amount.

This portfolio has an overall standard error of less than 1.5% and is based on the historical one-year daily closing price of each individual security. For those of you who aren't familiar with this statistic, it essentially says that over the long run investors can expect, with a 66% probability, that the overall portfolio value (excluding dividends) will fluctuate 1.5% over the time frame.

Statistically speaking, investors can expect the portfolio to fluctuate a total of 3% over the time frame with a 95% probability. We are looking for a low-volatility portfolio with a solid dividend yield for this client.

Ticker

Company

Price

Yield

1 Standard Error

% of Portfolio

TCP

TC Pipelines

$ 44.00

7.0%

1.32%

15.0%

WPZ

Williams Partners

$ 54.00

5.5%

1.56%

12.5%

NYB

New York Community Bank

$ 13.00

7.5%

2.14%

7.5%

PCEF

Proshares Income Composite Port.

$ 24.50

8.0%

0.95%

17.5%

MSFT

Microsoft

$ 30.00

2.6%

1.53%

7.5%

PM

Philip Morris International

$ 88.00

3.5%

1.34%

10.0%

ATVI

Activision Blizzard

$ 12.40

1.5%

1.53%

5.0%

BLK

Blackrock

$ 197.80

3.0%

2.44%

7.5%

IBM

IBM

$ 202.00

1.5%

1.38%

7.5%

WMT

Wal-Mart

$ 59.75

2.6%

1.05%

5.0%

KO

Coca-Cola

$ 72.00

2.8%

1.07%

5.0%

Total Dividend Yield

4.93%

Total St. Error

1.437%

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Solid Dividend Yield Portfolio With Low Standard Error