J. A. Saglimbeni's  Instablog

When I originally wrote my post on The Five Greatest Stocks For The Next Five Years back in October of 2011, I really thought that these five great stocks would basically trounce the S&P 500 by now, but something certainly did change with one of the five greats named Apple Inc. (AAPL). At the time of the original post Apple was trading just over $400 per share and went on to rally to just over $700 per share by the middle of September of 2012 and then preceded to crash all the way under $400 in April of this year. I have attached a chart below to show what happened:

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Chart courtesy of Barchart.com

Because of this correction in Apple, I now became convinced that the portfolio would now be on the losing end of things, but low and behold that would not be the case. So here are the results going into May 6th, 2013:

Portfolio Total Return With Dividends Reinvested: 34.6%

S&P 500 (SPY) With Dividends Reinvested: 32.9%

MasterCard (MA): Price: $553.55, Total Return of 60.1%

Under Armour (UA): Price: $57.71, Total Return of 36.7%

Google (GOOG): Price: $845.72, Total Return of 42.7%

Apple (AAPL): Price: $449.98, Total Return of 12.8%

Amazon (AMZN): Price: $258.05, Total Return of 20.9%

Stats courtesy of Low-Risk Investing

So there you have it, the Five Greats managed to continue to beat the S&P 500. Going forward. I think that the correction in Apple is probably done, but it now may be a company that is no longer in its growth phase, this is a bit concerning and something that I did not see coming this fast, but on a good note the company is committed to increasing their dividends as well as buybacks, this should allow the stock to at the least match the performance of the S&P 500. Once again, even after some corrections, I am still convinced that for the next 3+ years this portfolio should outperform the S&P 500.

Disclaimer: All articles are written as an opinion of the writer or writers. The contributors on this website are not professional investment advisors. These articles are written to share investing ideas that may be of interest to the reader. Always seek the advice of a professional investment advisor before investing.

Disclosure: I am long GOOG, UA, MA.

This month I figured I would wait for all earnings releases to come out for The Five Greatest Stocks portfolio. Since my last post in September, this portfolio has had a tough battle to stay ahead of the S&P 500. Though it was a close battle, the portfolio continues to outperform the Index. Dates cover November 2011 to January 31, 2013. All returns include dividends reinvested unless otherwise noted.

Portfolio total return with dividends reinvested: 27.5%

S&P 500 (SPY) with dividends reinvested: 24%

Under Armour (UA): Price: $50.50, Total Return of 19.6%.

Google (GOOG): Price: $775.60, Total Return of 30.9%.

MasterCard (MA): Price: $518.71, Total Return of 49.8%.

Apple (AAPL): Price: $453.62, Total Returns of 13.1%.

Amazon (AMZN): Price: $265, Total Return of 24.1%.

This was truly a trying time for the five greats, Under Armour and Apple had some serious breakdowns during this period. Apple is especially beginning to worry me, this company may be growing its earnings and revenues slower than I had expected. I will continue to monitor it, but I believe the worst is over for the stock. Going forward, Google and MasterCard have been star performers and the "overvalued" Amazon continues to amaze.

Disclaimer: All articles are written as an opinion of the writer or writers. The contributors on this website are not professional investment advisors. These articles are written to share investing ideas that may be of interest to the reader. Always seek the advice of a professional investment advisor before investing.

Disclosure: I am long UA, MA, AAPL.

Though I am known as recommending individual stocks as investments, I have been asked by my family, friends, and readers which mutual fund I would recommend for people who simply are too afraid to invest in individual securities and after studying plenty of different mutual funds, I think I have a good candidate. When I first began this journey, I had to get my "growth stock" way of thinking out of my mind, I mean I was trying to find an investment vehicle that even my sister (if you knew her you would understand) would not get nervous about. I also needed it to be highly rated by Morningstar, low in cost, and performance comparable to the S&P 500 over a long period of time. The fund that I have chosen is the Wellesley Income Fund (VWINX) from Vanguard.

The Fund Profile

According to Vanguard, The Wellesley Income fund has been around for 40 years and is considered a conservative balanced fund that typically invest in both stocks and investment-grade bonds. The fund is unique in its allocation: one-third to stocks and two-thirds to bonds. The fund is a no-load fund with a yield of around 2.3%. and an expense ratio of .25%. The Wellesley Income Fund also has a five-star rating from Morningstar.

The Performance

The Wellesley Income fund has had a total return of over 35% (dividends reinvested) over the last 5 years, this easily surpassed the total return of the S&P 500 of about 6% (dividends reinvested). The fund also managed to accomplish this with less volatility than the Index. I have also attached a chart showing the monthly percentage change over the last ten years (dividends reinvested) comparing The Wellesley Income Fund (VWINX) to both the S&P 500 (SPY) and the bellwether Johnson & Johnson (JNJ). The total return of The Wellesley Income Fund over the last ten years is around 96% with dividends reinvested which is slightly higher than the S&P 500 which returned about 93% and trumps the return of 70% for Johnson & Johnson. Statistics and descriptions form various sources including Yahoo!, MSN, Low-Risk Investing and Stock Rover.

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Chart Courtesy of Barchart

Conclusion

It is rare to find mutual funds that can consistently beat the major market indexes, but to find a conservative balanced fund that can manage to do it is nothing short of a miracle in my opinion. The Wellesley Income Fund from Vanguard is the one fund that I can now recommend to long-term investors both new and old, with its low costs, market beating performance, and minimal volatility; it is truly a fund for everyone.

Disclaimer: All articles are written as an opinion of the writer or writers. The contributors on this website are not professional investment advisors. These articles are written to share investing ideas that may be of interest to the reader. Always seek the advice of a professional investment advisor before investing.

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