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MyPlanIQ.com is the only web application that offers advanced asset allocation strategies customized to a wide range of retirement and taxable investment plans such as 401(k), IRA and brokerage accounts. The unique key advantages of MyPlanIQ.com are 1. Superior investment strategies with high... More
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  • 10 Low Volatility Stocks for the Volatile Markets
    iShares recently introduced MSCI USA Minimum Volatility Index Fund (USMV). Based on MSCI's description

    The MSCI USA Minimum Volatility Index aims to refl ect the performance characteristics of a minimum variance strategy for the US large and mid cap equity universe. The index is calculated by optimizing the MSCI USA Index, its parent index, for the lowest absolute risk (within a certain set of limits) using an estimated security co-variance matrix. Historically, the index has shown lower beta and volatility characteristics and a bias towards smaller cap stocks and lower idiosyncratic risk relative to the MSCI USA Index.

    The index historical performance

    Year MSCI USA MSCI USA Min. Vol
    1999 22.37 7.31
    2000 -12.56 6.03
    2001 -12.03 6.45
    2002 -22.71 -15.69
    2003 29.11 19
    2004 10.71 14.01
    2005 5.72 5.77
    2006 15.32 12.41
    2007 6.03 5.43
    2008 -37.14 -27.52
    2009 27.14 18.36
    2010 15.45 14.7
    Annualized 1.89% 4.56%

    Furthermore, the index offers higher yield (2.97% vs. 2.35%). In the current extremely low interest environment, this ETF can be a good candidate for US stock exposure in an asset allocation portfolio.

    Furthermore, the top 10 holdings (as of 10/31/2011) can be good starting points for a risk averse stock investor to form a relatively low risk portfolio: 

    MCDONALD'S CORP 1.72%
    ANNALY CAPITAL MANAGEMENT IN 1.70%
    BRISTOL-MYERS SQUIBB CO 1.70%
    O'REILLY AUTOMOTIVE INC 1.68%
    SOUTHERN CO 1.66%
    MICROSOFT CORP 1.66%
    INTL BUSINESS MACHINES CORP 1.65%
    CONSOLIDATED EDISON INC 1.65%
    ACCENTURE PLC-CL A 1.65%
    ABBOTT LABORATORIES 1.55%

    From the holdings, one can see most of them are blue chip companies with stable cash flow.

    Disclaimer: 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.
    Dec 08 12:41 AM | Link | Comment!
  • 5 Stocks The Motley Fool Owns

    Stock pundits are quick to dish out stock recommendations -- but when it comes down to it, most don't even own the stocks they recommend. The Motley Fool recently published a list of 5 stocks that they recommend and own.

    Qualcomm Fast Facts  
    Market Capitalization: $91.9 billion
    Industry: Communications Equipment
    Revenue (TTM): $13.8 billion
    Earnings (TTM): $4.1 billion

    Smartphones are everywhere, and there will undoubtedly be many long-term winners in the field. Qualcomm [Nasdaq: QCOM] is ideally positioned to be a leader in this market.

     

     

     

    Ultra Petroleum Fast Facts  
    Market Capitalization: $7.2 billion
    Industry: Oil & Gas
    Revenue (TTM): $964 million
    Earnings (TTM): $331 million

    Ultra Petroleum [NYSE: UPL], a natural gas-focused exploration and production company that makes its living drilling in Wyoming's Green River Basin and Pennsylvania's Marcellus Shale

     

     


    Fiserv Fast Facts  
    Market Capitalization: $8.7 billion
    Industry: Data Processing
    Revenue (TTM): $4.2 billion
    Earnings (TTM): $450 million

    Fiserv [Nasdaq: FISV] performs account and check processing, credit and debit card services, electronic transfers and bill payment, and more.

     

     
    Annaly Capital Fast Facts
    Market Capitalization: $16.0 billion
    Industry: Real Estate Investment Trusts
    Revenue (TTM): $1.9 billion
    Earnings (TTM): $1.7 billion
    Dividend Yield: 15.5%

    Annaly Capital [NYSE: NLY] uses short-term financing to buy longer-term mortgage-backed securities and other debt, largely issued by Fannie Mae and Freddie Mac.

     

     

     

     

    Altria Fast Facts  
    Market Capitalization: $54.5 billion
    Industry: Tobacco
    Revenue (TTM): $16.5 billion
    Earnings (TTM): $3.4 billion

    Altria [NYSE: MO] is the company behind Marlboro cigarettes, Copenhagen and Skoal smokeless tobacco, and quarter-owner of the beer behemoth SAB Miller.

     

     

     

    This is a diversified selection of stocks and it will be interesting to compare this 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)
    CASH CASH
    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)



    Portfolio Performance Comparison
    Portfolio/Fund Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr Sharpe
    Retirement Income ETFs Tactical Asset Allocation Moderate-3%-18%9%74%8%58%
    Retirement Income ETFs Strategic Asset Allocation Moderate-3%-29%11%44%2%7%
    5 Stocks The Motley Fool Owns-9%-38%6%16%1%-1%

    However, the stock selections appear on paper, their performance has not been that attractive. Having good dividends is going to keep you afloat but both the dividend ETF portfolio and some blue chip stocks will likely serve you better than this.
     
    Three Month ChartOne Year ChartThree Year ChartFive Year Chart



    The more detailed analysis and graphs give you a visual view of the volatility.


    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.
    Oct 12 2:49 PM | Link | Comment!
  • The Dow's 10 Best Dividend Stocks
    For the long term investor, dividend stocks have significant benefits in terms of providing income and growth potential. We continue to examine different portfolios to see what we can learn and use to further our investment portfolios.

    We are looking at the hit parade of dividend stocks. We have already looked at the bottom 20 and we now look at the top ten stocks and we can compare their performance along with the performance of a dividend ETF portfolio.

    Jake Lynchof The Street compared the pessimism of Pimco and Ken Fisher in terms of whether there is a strong future for stocks. He concluded that the case for stocks is compelling, given the low yields offered by bonds and the government's commitment to accelerate economic growth. Among the cheapest stocks in the U.S. market are Dow components, which offer clean balance sheets, powerful brands and emerging-markets exposure.


    The top ten equities  according to this report are:
    • KO Coca-Cola Company
    • JPM JPMorgan Chase & Co
    • CVX Chevron Corporation
    • MSFT Microsoft Corporation.
    • UTX United Technologies
    • MRK Merck & Co Inc
    • HPQ Hewlett-Packard Co.
    • KFT Kraft Foods Inc.
    • WMT Wal-Mart Stores Inc.
    • IBM International Business Machines.

    We entered these funds into our system and then compared it with a balanced portfolio of Dividend producing ETFs.

    Asset Fund in this portfolio
    REAL ESTATE ICF (iShares Cohen & Steers Realty Majors)
    CASH CASH
    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)


    Portfolio Performance Comparison
    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR5Yr Sharpe
    Streets Top Ten Dividend Stocks 32% 197% 5% 17% 9% 29%
    Retirement Income ETFs Strategic Asset Allocation Moderate 18% 186% 3% 16% 5% 25%
    Streets 10 Dividend Stocks That Can Be Beaten 15% 114% 2% 8% 5% 16%
    Retirement Income ETFs Tactical Asset Allocation Moderate 14% 123% 9% 76% 11% 75%




    Three Month Chart
    http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=33556,33554,22065,33555,22062&securityID=&yearNum=1
    Five Year Chart

    The more detailed analysis and graphs show the volatility of the stock portfolio which has performed well in the short term but not in the longer term.


    This is more what we are looking for in a dividend stock portfolio -- consistent returns over a longer period. We note, however, that the Sharpe ratios are lower than the ETF portfolio but this has to be contrasted with the more activity required for the ETF portfolio in terms of monthly tuning.

    This is an interesting contrast but not compelling against some of the other returns we have seen -- for example:


    Symbols:
    KO, JPM, CVX, MSFT, UTX, MRK, HPQ, KFT,  WMT, IBM


    Long and Short Ideas, investing for income, ETFs and portfolio strategy


    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.




    Jun 03 11:58 AM | Link | Comment!
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