Sunday, January 4, 2015

A Performance Update from a Forgotten Portfolio

As I was doing some reviews of old posts that I had written, I stumbled upon a post from March 2012 titled, A Dividend Portfolio for the Ages and then I realized that I never made another update like I do with my Five Greats articles. I began to wonder why I did not follow up and realized that some of the dividend stocks on the list I no longer own and that I had sold out of them during 2012, but my curiosity got the best of me and I wanted to know how this portfolio had done nevertheless. I do still own some of the stocks here and am also thinking about taking position of a few of the ones I sold.

I will compare the portfolio to the S&P 500 since March 1st, 2012 to December 31st, 2014 and I will also show how each individual stock has performed. Total returns will include both dividends reinvested and price appreciation.

The 12 Dividend Stocks:

BHP Billiton (BBL): $43, Total return for period was -27%.

Balchem (BCPC): $66.64, Total return for period was 148.2%.

Digital Realty Trust (DLR): $66.30, Total return for period was 6.5%.

W.W. Grainger (GWW): $254.89, Total return for period was 28.1%.

Intel (INTC): $36.29, Total return for period was 48.7%.

Johnson & Johnson (JNJ): $104.57, Total return for period was 74.9%.

MasterCard (MA): $86.16, Total return for period was 107.5%.

Microsoft (MSFT): $46.45, Total return for period was 58.3%.

Starbucks (SBUX): $82.05, Total return for period was 75.7%.

T. Rowe Price (TROW): $85.86, Total return for period was 48.6%.

Union Pacific (UNP): $119.13, Total return for period was 128.1%.

Exxon Mobil (XOM): $92.45, Total return for period was 15.2%.

The total return of the dividend portfolio was 59.4%

The total return of the S&P 500 was 59.5%

Chart courtesy of Low Risk Investing.

Unbelievable that the portfolio managed to match the S&P 500, though when I originally wrote the article over two and a half years ago I truly expected that it would actually beat the Index. I am sure many of you are wondering why the portfolio did not perform better and I suspect that the under performance of BBL, DLR, and XOM have something to do with this. As many investors know, stocks that are related to energy or commodities have been major laggards, but will probably have better performance going forward.

Will this dividend portfolio end up performing better than the S&P 500? Only time will tell, but in my opinion after all is said and done in a little bit over two years from now this group of stocks will prevail.

Special note: I have been questioned many times from my followers and readers on how exactly can a small investor invest in these twelve stocks when the prices of the shares are so high. The simple solution is to use the investment services of Motif Investingwhere a small investor can create their own portfolio of up to 30 stocks with a minimum investment of $250.

Disclaimer: All articles are written as an opinion of the writer or writers. The contributors on this website are not professional investment advisors. These articles are written to share investing ideas that may be of interest to the reader. Always seek the advice of a professional investment advisor before investing.

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