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An Older Folk Portfolio

Summary

Income has priority.

Wanted small amount of growth.

Wanted to limit number of holdings.

The following portfolio belongs to a 71 year old. It is a taxable account and there are no RMD concerns. The individual wants this as a Legacy Portfolio to provide income for his wife in the event he passes first, and then when she passes away, the portfolio will go to their daughter, hence the small amount of growth. I also manage an Ira for the daughter.

Primary objective: To build an income stream that is reliable, predictable and increasing.

The only concern the portfolio owner had was to simply own good companies. He is not concerned with beating or matching benchmarks, he's not concerned about market drawdowns, he has already been through the Great Recession with me and saw his income rise while the portfolio value dropped, but he was impressed with how the portfolio rebounded as a result of owning good companies. He's sold on the process.

He owns 30 companies, not looking to own anymore. My job is to continue building his positions up in size. A full sized position in his portfolio represents 3.3% of the portfolio value. Anything above that we consider to be an overweight position.

He has over 70% of this portfolio in the Defensive sector, he doesn't like taking risks so I try to keep it as conservative as possible.

Here is his breakdown: (Company plus position size)

Overweight and full positions:

D ........ 7.4%

JNJ ...... 6.4%

MO ...... 6.1%

O ........ 5.9%

KHC .... 5.8%

PG ...... 5.2%

T ........ 4.8%

GIS ..... 4.4%

MCD .... 4.2%

DUK .... 3.9%

PM ...... 3.9%

KMB .... 3.8%

CVX .... 3.7%

SO ...... 3.5%

UTG .... 3.5%

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Up to 3/4 sized positions:

VZ ...... 3.1%

KO ...... 3.0%

GPC .... 2.4%

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Up to 1/2 sized positions:

HCN .... 1.8%

HD ...... 1.8%

PAYX ... 1.7%

UL ...... 1.7%

MMM ... 1.6%

SRE .... 1.6%

PEP ..... 1.4%

XOM .... 1.4%

TGT .... 1.3%

V ........ 1.1%

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Up to 1/4 sized positions:

CBRL .. 0.8%

SBUX .. 0.8%