The Launch Of This New Portfolio Could Bring Us Closer To 'Alpha'

by: Regarded Solutions

As promised in my last update, which you should review right now, I am pleased to launch our 3rd portfolio, exclusive to Seeking Alpha subscribers. Those who have followed my work over the last 2 years have been able to see some very positive results with 2 of our existing portfolios: The Team Alpha Retirement Portfolio, and The Young And Restless Portfolio.

Each has a unique focus and different investment criteria, but BOTH have had a wonderful run so far. The Team Alpha Retirement Portfolio is focused on income with the potential for some growth. Fortunately, we have been able to have a mix of stocks that has a yield on cost of almost 5%, as well as a pretty cool 42% increase over a two year period An original investment of $100k is now $142k, and our income stream has reached over $6,600 annually. The Young And Restless Portfolio is focused on creating wealth quickly, with a focus on strong potential growth stocks. Even after taking a hit with one of the stocks yesterday the portfolio is up over 60% in less than one year, and has turned $80k into more than $133k thus far.

And now for our new portfolio journey, I have developed what I consider to be a growth and income portfolio that combines the best of both of our existing portfolios, but with a very unique focus: Growth and income, without fixed income investments.

Introducing The "Team Alpha Growth And Income Portfolio"

When investors speak about reaching "alpha", they hope to have a strategy in place that will offer them not only strong growth from capital appreciation, but also a way to maximize an income stream without too much risk. Nothing is risk free, but it is my opinion that a combination of dividend winning, mega cap, blue chip stocks mixed with a good percentage of growth stocks, could move investors much closer to "Alpha".

The brand new Team Alpha Growth And Income Portfolio consists of Apple (NASDAQ:AAPL), Ambarella (NASDAQ:AMBA), Cisco (NASDAQ:CSCO), CSX Corp. (NYSE:CSX), Chevron (NYSE:CVX), Ford (NYSE:F), Facebook (NASDAQ:FB), Galena (GALE), General Electric (NYSE:GE), Altria (NYSE:MO), Johnson & Johnson (NYSE:JNJ), Coca Cola (NYSE:KO), McDonald's (NYSE:MCD), Realty Income (NYSE:O), Procter & Gamble (NYSE:PG), AT&T (NYSE:T), Wells Fargo (NYSE:WFC), Exxon Mobil (NYSE:XOM), and Yahoo (YHOO).

Each of our dividend stocks has the potential to give us a "raise" every single year, and our growth stocks will hopefully drive greater capital appreciation for us to use to EXPAND our core assortment.

I have funded this portfolio using a $100,000 initial investment, and purchased all of the stocks on Monday 9/30/2013 at the best possible prices available as I ordered each. Here is a complete breakdown of the new portfolio:

Stock Shares Price Now Total Value Cost Basis Orig.Yield Allocation
AAPL 10 475 4750 $475 2.50% 5%
AMBA 350 19 6650 $19 x 7%
CSCO 125 23 2875 $23 2.80% 3%
CSX 125 26 3250 $26 2.30% 3%
CVX 30 120 3600 $120 3.20% 4%
F 200 17 3400 $17 2.30% 3%
FB 100 50 5000 $50 x 5%
GALE 3500 2 7000 $2 x 7%
GE 175 24 4200 $24 3.10% 4%
MO 175 34 5950 $34 5.50% 6%
JNJ 40 86 3440 $86 3.00% 4%
KO 75 38 2850 $38 2.90% 3%
MCD 40 97 3880 $97 3.40% 4%
O 150 40 6000 $40 5.50% 6%
PG 50 76 3800 $76 3.10% 4%
T 175 34 5950 $34 5.40% 6%
WFC 100 41 4100 $41 3.00% 4%
XOM 50 86 4300 $86 3.00% 4%
YHOO 175 33 5775 $33 x 6%
Cash Rsvs x x 13,230 12%
Tot.Value x x 100,000 3.72% 100%

Each position has come from our existing portfolios except for Altria. Going forward we will be adding stocks that will probably not be part of any other portfolio. For this launch, I listed the current dividend yield as well as our beginning allocation in each stock. In that way you can determine if the positions are right for your individual needs.

While my initial goal was to have a 60/40% split between growth and income stocks, it does not appear to be that way just from the look of the core stocks. However, growth from stocks that also have a very strong track record of paying dividends, is evident in many of the stocks themselves, so from my vantage point, we are at almost a 50/50 split to start.

Our goals for this portfolio are as follows:

  • A dividend yield of roughly 3.50% to start, (we hit 3.72%).
  • Capital appreciation greater than the S&P 500 on an annual basis.
  • A target allocation of 60% growth and 40% income.
  • Capital preservation will be a vital goal, as this portfolio is geared for those of us who are retired as well as the younger, moderately conservative investor.
  • Furthering the education of all of our investors in portfolio management, as well as money management.
  • Dividends received will be added to our cash reserves, not re-invested.

We will monitor this portfolio the same way we do with our other two. Updates once per month and regular announcements of stocks that we will be adding or dropping and why, as well as any activity in the portfolio that is important for investors to know.

Our First Order Of Business

As you can see, we have about $13,000 in cash reserves that I would like to invest somewhere. I have my eye on another REIT or two, and will be writing an in-depth report on the ones I select. That being said, I would also like to hear from you as to what stocks YOU might like to see in the portfolio.

I am certain that if we work together, maintain a disciplined portfolio management style, and do our research regularly, we could achieve some great success with this portfolio.

Hop on board now, from the start!

Disclaimer: The opinions of the author are not recommendations to either buy or sell any security. Please do your own research prior to making any investment decision.

Disclosure: I am long AAPL, AMBA, CSCO, CSX, CVX, F, GALE, GE, JNJ, KO, MCD, O, T, WFC, XOM, YHOO. 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.