Retirement Strategy: Our New Portfolio Takes Flight

Includes: AAPL, CVX, F, GE, GM, JNJ, KO, MCD, PG, T, XOM
by: Regarded Solutions

Executive Summary:

  • Portfolio expansion with potential "future dividend champs".
  • Target price to add to shares already in the portfolio.
  • A simple way for beginners to build a portfolio for retirement.


Several weeks ago a brand new portfolio was "born". The "Buy The Dips Portfolio", or BTDP was created to offer another rather simple way to either begin a portfolio, or add to existing stocks within a portfolio.

What I am attempting to show is that for beginners, or newbie's or investors who want a basic and simplified way to "know" when to buy a stock or add shares, targeting the mid point between the 52 week highs and 52 week lows, offers a simple strategy without having to do deep technical analysis.

That being said, this portfolio is geared for retirement and a more secure financial future. Only the biggest and best blue chip dividend paying champions (or those we feel will become one) are part of this portfolio.

The BTDP consists of the following stocks: AT&T (NYSE:T), Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ), Coca-Cola (NYSE:KO), Procter & Gamble (NYSE:PG), General Electric (NYSE:GE), McDonald's (NYSE:MCD), Chevron (NYSE:CVX), Apple (NASDAQ:AAPL) General Motors (NYSE:GM), and Ford (NYSE:F).

We Might Not Buy Right All The Time But We Also Will Not Buy Wrong

The key here is that I am not attempting to time the market. Buying at that the target price will enable investors to build positions at whatever the market deemed to be a "fair" "50% ago" (1/2 way between the high and low for the last year).

Since the stocks are not the type we need to watch every second, our "garden" can be tilled, and seeds planted whenever I have the cash, and I hit my target price.

Here is my very first "update" as to how I am doing with my new portfolio:

BUY/HOLD PAID STOCK YIELD 2/28/2014 52 wk lo 52 wk hi Tgt Price +/- %
Buy 31.95 T 5.60% 31.97 $32 $39 $35.50 0.00%
Hold 90.05 XOM 2.80% 96.27 $85 $102 $93.50 6.95%
Hold 86.78 JNJ 3.10% 92.09 $75 $96 $85.50 4.65%
Buy 37.21 KO 3.00% 38.21 $36 $43 $39.50 2.75%
Buy 75.71 PG 3.10% 78.71 $74 $86 $80.00 4.01%
Hold 24.35 GE 3.60% 25.47 $21 $28 $24.50 4.75%
Buy 93.02 MCD 3.50% 95.13 $92 $104 $98.00 2.55%
Buy 111.14 CVX 3.60% 115.33 $109 $127 $118.00 3.65%
Hold 526.45 AAPL 2.25% 526.24 $389 $575 $490.00 0.00%
Hold 36.41 GM 3.30% 36.17 $26 $42 $34.00 0.00%
Hold 15.15 F 3.20% 15.41 $12 $18 $15.00 0.00%

The current target price is noted to the right, and that number will obviously change whenever we update this portfolio. An additional feature I have added is the buy/hold column on the left. It is not intended to be a suggestion to buy NOW or back up the truck, just my overall opinion of the stock itself, based upon our goal of producing income with dividend growth stocks.

I have also left out any specific numbers. Investors have a certain amount of money to invest, and everyone is unique, and will have different goals and objectives for any particular stock.

To make it easy to follow, I have an equal weight for our purposes here, to continue to show how the portfolio is doing.

Of any of the stocks in this portfolio, T is perhaps the one I would target first, if I did not own it, or wanted to add more shares. Close to a 6% dividend yield for this "champion" is very difficult to match among all other blue chip stocks out there.

And The Results Are....

Whoops, sorry about that, for a second I thought this was the Academy Awards Ceremony. For our purposes it is all about the numbers not the movies. Keep in mind that I am placing an equal weight for each stock to make it easy and clear for me to show our progression.

As of now, our dividend yield is 3.37%, and my portfolio value has increased by 2.67%. Not a bad start for a newbie! If a beginner had followed this particular strategy, the dividend yield would be more than 1% higher than the S&P 500 average yield but trailing the index gains by about 5%. Keep in mind that this is all about the income and a simple strategy of knowing when to buy a stock.

The gains are second to the income, but the gains could also surpass the S&P 500 over time, especially as these mega cap blue chippers move back over their 52 week highs.

The Bottom Line

I hope you are following my new little portfolio here. Not for the stock selections per-se, but for the portfolio management strategy being employed.

Keeping it simple can work!

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

Disclosure: I am long AAPL, CVX, F, GE, GM, JNJ, KO, MCD, T, XOM. 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.