Gregg Greenberg of StockPikr reports on the words and actions from Oliver Pursche, co-portfolio manager of GMG Defensive Beta Fund (MPDAX).
Oliver says, "No one is saying you shouldn't own growth stocks. The point is that dividends are a key component of total return, so investing in high-quality, high dividend paying stocks that also have growth characteristics should do very well in 2012, just like it did in 2011."
His three high-quality dividend stock picks for 2012 are:
McDonald's and Intel have been featured a great deal recently but Shell is a less frequent visitor in the spotlight.
We have reviewed other sets of three equity selections and it will be interesting to see how this one performs. All of these are strong companies with worldwide markets and they have strong dividend performance.
|Asset||Fund in this portfolio|
|REAL ESTATE||(BATS:ICF) iShares Cohen & Steers Realty Majors|
|FIXED INCOME||(NYSEARCA:TIP) iShares Barclays TIPS Bond|
|Emerging Market||(NYSEARCA:VWO) Vanguard Emerging Markets Stock ETF|
|US EQUITY||(NYSEARCA:DVY) iShares Dow Jones Select Dividend Index|
|US EQUITY||(NYSEARCA:VIG) Vanguard Dividend Appreciation ETF|
|INTERNATIONAL EQUITY||(BATS:IDV) iShares Dow Jones Intl Select Div Idx|
|High Yield Bond||(NYSEARCA:HYG) iShares iBoxx $ High Yield Corporate Bd|
|INTERNATIONAL BONDS||(NYSEARCA:EMB) iShares JPMorgan USD Emerg Markets Bond|
- CMG Defensive Beta Fund 2012 Dividend Picks -- Total of $10K invested equally in each stock
- Retirement Income ETFs Tactical Asset Allocation Moderate -- Above funds using TAA (40% fixed income, 30% for each of the top two asset classes)
- Retirement Income ETFs Strategic Asset Allocation Moderate -- Above funds using SAA (40% fixed income, 12% for each of the five asset classes -- funds selected based on price momentum)
Portfolio Performance Comparison
|1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Retirement Income ETFs Tactical Asset Allocation Moderate||1%||2%||22%||10%||77%||7%||54%|
|CMG Defensive Beta Fund 2012 Dividend Picks||-1%||28%||155%||21%||112%||13%||53%|
|Retirement Income ETFs Strategic Asset Allocation Moderate||3%||2%||14%||16%||103%||2%||7%|
This is a pretty good return based on these stalwart stocks. We note that with only three equities, there will be volatility but the returns are solid over the five-year horizon. This selection is a great basis upon which to build a long-term investment portfolio.
Having a base of three strong performers is a great start and it makes it easier to review and make changes if necessary.
These guys are on the ball.
Three-Month Chart One-Year Chart Three-Year Chart Five-Year Chart
As I look over the longer time horizon, this selection has done very well. The volatility is decent and it has weathered the downturns with less of a drop than others. Given that this is a fire and forget historical view compared with monthly intervention with the benchmarks, this is good.
Personally speaking, I have now purchased small holdings in MCD and INTC but not in RDS as I already have a small holding in CVX.
Additional 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.