Long Only, Value, Growth At A Reasonable Price, dividend income
Contributor Since 2010
A "balanced fund" usually means a blend of stocks and bonds. A "balanced portfolio" usually means one that includes broad sector representation. I'm trying to design and manage a balanced portfolio. But more importantly, I'm trying to be a balanced investor and portfolio manager.
I see at least three crucial characteristics:
My wife and I enjoyed some R&R this week. I re-read Justin Law's excellent December 13 article about Pattern Energy Group (PEGI), his first SA article. The article and the ensuing conversation were very insightful and timely in light of recent tax legislation.
The more leisurely pace of the week gave me an opportunity to check some SA articles about the recent federal tax legislation. John Engle's December 21 article about the impact on REITs was particularly relevant for dividend investors. His bottom line: "...the impact of tax reform on the REIT sector can be called positive. ...REITs will benefit from the range of new provisions and deductions...."
While researching my Kimberly-Clark article (linked below), I was helped by David Trainer's December 28 article, "Hidden, Classic Value in a Rich Market." This introduced me to a new metric: NOPAT, or net operating profit after tax, which excludes unusual losses and gains, financing costs, goodwill and other non-cash items. I always learn something new when I explore Seeking Alpha.
Brian Gilmartin's January 13 article provides some understanding for the strength of this leg of the bull market.
We saw three movies that dealt with the struggle between competing centers of power in three very different contexts:
One takeaway, quoted in the movie, was part of the U.S. Supreme Court's 6-3 decision in the Nixon administration's suit against the New York Times (which first broke the story) and the Post, written by Justice Hugo Black: "In the First Amendment, the Founding Fathers gave the free press the protection it must have to fulfill its essential role in our democracy. The press was to serve the governed, not the governors."
The relaxed pace of the week made it possible for me to write three articles:
As I described in a January 6 blog post, it's my intent to write a weekly blog post (such as this one--for Week 2, 2018) about the week just past, a review of the week ahead and a brief portfolio update. I'm writing these weekly blog posts as a way to express my gratitude to those (now 10,000+) who "follow" me. I appreciate your friendship and your collegiality.
This week, I made one transaction. I added some shares of the Vanguard Utilities Index Fund (VPU) at $112.25. Prior to the purchase, this ETF was 0.48% of the portfolio. Now it's 0.70% of the portfolio. My target is 1.0%.
The current portfolio yield is 3.63%. The cash position is 4.09%. A year-end update of the portfolio is available here.
I'm reviewing several holdings this week: Toronto-Dominion (TD), Royal Bank of Canada (RY), Dominion Energy (D), KMB, PPL Corp (PPL), Realty Income (O), WP Carey (WPC) and NNN. REITs and utilities appear to be attractive for long-term investors. The market is closed on Monday, so we get an extra day of preparation for the week ahead.
Sometimes I've given up too quickly on a stock. Deere (DE) comes to mind. Sometimes I've stayed with a stock too long. The jury is out on General Electric (GE), but some of my friends think I should have dumped it.
It's important to know when to make a change. Nick Saban demonstrated that on January 8 when he put in a freshman quarterback at halftime. The freshman and the sophomore he replaced showed extraordinary maturity and class in the way they handled themselves. There are many ways to practice the "art of balance."
(Photo from Sporting News)
...and future articles on a real-time basis, just click "Follow" at the top of this blog, then choose "Follow this author" and "Real-time alerts."
You can access a list of previous articles here.
It's not my intent to advocate the purchase or sale of any security. My purpose is to offer ideas for stocks to study and to share a journal of my effort to design and build a retirement portfolio that puts a priority on relative safety, a history of dividend growth and solid future prospects. Your goals and risk tolerance may differ, so please do your own due diligence.
Disclosure: I am/we are long JNJ, MRK, PFE, WMT, XOM, MSFT, PG, CSCO, AAPL, TD, MMM, PEP, ADP, RY, SPG, VTR, BCE, BEP, DUK, KMB, O, EPD, D, SKT, MMP, PPL, TGT, NNN, BIP, WPC, GPC, APLE, HASI, IBM, PEGI, KO, TXN, VFC, MRCC, GE, HRL, QCOM, VTI, VEA, VWO, VYM, VOE, VNQ, VPU.