Retirement Strategy: 'Team Alpha' Portfolio Continues To Trounce The Averages

by: Regarded Solutions

We began our retirement portfolio back on 10/23/2011, and this series of articles on 11/23/2011, with the input of our readers. For 10 months we have tracked the performance of this well-diversified and balanced portfolio of strong dividend paying, top tier and blue chip mega cap stocks.

Not only have we done well, but we have beaten the market averages handily.

Our portfolio now consists of; Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), AT&T (NYSE:T), General Electric (NYSE:GE), Annaly Capital (NYSE:NLY), Southern Company (NYSE:SO), Procter & Gamble (NYSE:PG), Intel (NASDAQ:INTC), Realty Income (NYSE:O), Coca-Cola (NYSE:KO), Bank of America (NYSE:BAC), American Capital Agency (NASDAQ:AGNC), Wal-Mart (NYSE:WMT), Cisco (NASDAQ:CSCO), 3M Company (NYSE:MMM) and Bristol-Myers Squibb (NYSE:BMY).

"Team Alpha" Portfolio Update

Stock #Shares 8-31-PPS TotValue
XOM 100 87/shr 8700
JNJ 100 68/shr 6800
T 100 37/shr 3700
GE 100 21/shr 2100
NLY 300 18/shr 5400
BAC 300 8/shr 2400
PG 100 67/shr 6700
KO 100 37/shr 3700
SO 200 45/shr 9000
INTC 200 25/shr 5000
O 150 42/shr 6300
AGNC 150 35/shr 5250
WMT 100 73/shr 7300
CSCO 200 19/shr 3800
MMM 100 93/shr 9300
BMY 100 33/shr 3300
Cash Rsvs x x 34883
Tot Value x x 123633
Click to enlarge

Our portfolio has increased by 23.63% over the course of 10 months. During the same time frame, the S&P 500 has increased by 15.65%. The Team Alpha portfolio has trounced the S&P by nearly 8%.

This is quite an impressive performance. Add to that, a stream of income derived from a dividend yield of roughly 4.22% as of now (included in the results).

For the month of August we had a slight drop in the overall value of our portfolio by roughly .33% (in July, we grew by 4.9%, review the results here). The Dow increased by .55%, the Nasdaq increased by about 6%, and the S&P 500 increased by about 2%. The rather large increases in the Nasdaq and the S&P can be traced back to one stock; Apple (NASDAQ:AAPL).

Apple's share price increased by about 10% for the month, and it basically led the Nasdaq and S&P higher by itself. Backing out Apple, the S&P would be down a drop and the Nasdaq would have been flat. Too bad we did not have Apple in our portfolio, but at the time it did not meet our criteria.

That being said, a 23.63% increase is a wonderful return. It has been achieved with stability as well as an eye on dividends; the lifeblood of a retirement portfolio.

Actions Taken In August

We hardly sat on our hands in August as we booked some profits and redeployed some cash. Not only did we increase several of our core positions, but we also expanded our portfolio with some new positions.

Trades Made In August Shares Cost Date
Paid 17 for NLY 190 3230 2-Aug
Paid 41 for O 50 2050 2-Aug
Paid 34 for AGNC 150 5100 2-Aug
Paid 74 for WMT 100 7400 3-Aug
Paid 19 for CSCO 200 3800 17-Aug
Paid 92 for MMM 100 9200 23-Aug
Paid 32 for BMY 100 3200 27-Aug
Cash Redeployed 33980 x
Click to enlarge

We also collected $294 in dividends (stocks that went ex-dividend) for the month (added to our cash) from XOM, JNJ, PG, SO and O.

We did not write any covered calls, nor did we sell any puts. The premiums were not that strong to warrant the risk. In the next few days I will take another look at taking some of these actions to tweak our overall returns as we head into the fall season.

Stability, Safety, And Security Are Our Cornerstones

Investors who are either in retirement or nearing it, have some basic goals in common. We like stability in our stock selections so we can sleep better. We seek safety by investing in some of the finest and most reliable companies on the planet. We look for security from the income stream that dividend growth stocks offer.

Share price stability is vital for retirees, as are the dividends the stocks produce. While dividends are vital, we do need to keep an eye on our total return as well.

When we review the charts above, we can clearly see how stable the share prices of every single stock within our portfolio has been. While there are never any guarantees for the future, I would suggest that this diversified portfolio could offer much of what any retiree seeks.

  • More stability

  • More safety

  • More security

My Opinion

We have a new look with the added stocks and increased positions in our REIT sectors. Not only that, but even as we redeployed cash into income producing stocks, we still have a liquid cash position of about 30%. That amount gives us even more flexibility to take advantage of opportunities as they arise.

For any investor, whether you are seeking a balanced retirement portfolio, or a solid portfolio for the long haul, that mitigates many risks, our portfolio offers something for everyone.

Disclosure: I am long XOM, JNJ, GE, T, NLY, KO, SO, INTC, CSCO, O, AGNC, BAC, MMM, BMY, WMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.