When this portfolio is fully invested, it contains 20-25 stocks. We seek out the best Dividend and Growth stocks in the world today. These positions are equally weighted within the portfolio. These stocks must have both excellent valuation and momentum characteristics. They must also pay a dividend.
We focus on companies that are still growing their earnings. We would rather own a stock paying a 1% dividend yield that is still growing it earnings, as opposed to one that is paying a 6% dividend yield and not growing its earnings anymore.
This portfolio is best suited for More Conservative Growth Investors that have a time horizon of at least 3-5 years. Dividend paying stocks are generally less volatile than pure growth stocks, but they obviously still have risk, however.
This is an actively managed portfolio. We keep a shorter leash on these stocks to protect on the downside, but we seek long-term capital gains wherever possible.
We will also do our best to protect this portfolio from the next recession and bear market. We cannot guarantee anything, but we will raise cash and employ inverse index or sector ETF’s when we feel that the U.S. economy is finally headed into a recession.
We cannot protect investors from normal sell-offs (5-20%) along the way. These are secondary reactions within a Primary Trend. There have been many such sell-offs during the last ten years, but during that time, the S&P 500 has gone from 660 to over 4,000. Every sell-off over the last ten years has been a buying opportunity.
We will do some selling and raise cash during short-term sell-offs as a precautionary measure. We do have a line-in-the-sand on all of our holdings. While extremely important, this protection could cost you some performance over the long haul, however. That is the trade-off for having such protection.
This portfolio was started on January 1, 2009. Performance of this portfolio can be found in our weekly Best Stocks Now Newsletter.