THE RATIONAL INVESTOR: 'Sleeping Soundly Portfolio' does its job in first half of 2022
After the just concluded horrible six months, investors will be more than mildly disappointed, perhaps shocked, when they review their second quarter’s brokerage statements as their U.S. equity portfolios could be down about 19.9% in line with the S&P 500 (including reinvested dividends). My “Sleeping Soundly Portfolio” outperformed that. Both outperformed the “Total U.S. Market” that fell 21.3%.
The $120,000, 12-stock equally dollar weighted portfolio was designed to have both lower volatility and total returns (capital appreciation plus non-reinvested dividends) that are in line but may slightly lag the S&P 500 when it rises but perhaps outperform when it falls significantly. This doesn’t mean when the stock market declines significantly the portfolio won’t decline, only that it may not decline as much.
I track this portfolio on a quarterly basis assuming no reinvestment of dividends and no voluntary changes. The stocks were “purchased” at their 2021 closing prices. Caveat: Investors should do their own due diligence before selecting any security.
For first quarter, the portfolio was down 16.6% to $100,091. This included $1,331 of non-reinvested dividends.
The portfolio (disclosure: My family owns AAPL, AMT, BLK.):
• American Tower (AMT) is a real estate investment trust in the communications area. Its 2021 closing price was $292.50 and its second quarter’s was $255.59. Its indicated dividend is $5.60.
• Apple (AAPL) is a company that manufactures electronics and provides services. Its 2021 closing price was $177.57 and its second quarter’s was $136.72. Its indicated dividend is $0.92.
• Blackrock (BLK) is an investment manager. Its 2021 closing price was $915.56 and its second quarter’s was $609.04. It’s indicated dividend is $19.52.
• Caterpillar (CAT) sells construction and mining equipment. Its 2021 closing price was $206.74 and its second quarter’s was $178.76. Its indicated dividend is $4.80.
• Cisco Systems (CSCO) designs and sells internet networking systems. Its 2021 closing price was $63.37 and its second quarter’s was $42.64. Its indicated dividend is $1.52.
• General Dynamics (GD) is an aerospace and defense company. Its 2021 closing price was $208.47 and its second quarter’s was $221.25. Its indicated dividend is $5.04.
• Intel (INTC) develops and manufactures computer chips and related technologies. Its 2021 closing price was $51.50 and its second quarter’s was $37.41. Its indicated dividend is $1.46
• JPMorgan Chase (JPM) is a worldwide financial services company. Its 2021 closing price was $158.35 and its second quarter’s was $112.61. Its indicated dividend is $4.00.
• Packaging Corporation of America (PKG) makes container products. Its 2021 closing price was $136.15 and its second quarter’s was $137.55. Its indicated dividend is $5.00.
• Penske Automotive Group (PAG) is a diversified transportation services company. Its 2021 closing price was $107.22 and its second quarter’s was $104.69. It’s indicated dividend is $2.00.
• Pfizer (PFE) is in the biopharmaceutical business. Its 2021 closing price was $59.05 and its second quarter’s was $52.43. Its indicated dividend is $1.60.
• Williams Sonoma (WSM) is a retailer in the specialty home business. Its 2021 closing price was $169.13 and its second quarter’s was $110.95. Its indicated dividend is $3.12.
All data and forecasts are for illustrative purposes only and not an inducement to buy or sell any security. Past performance is not indicative of future results. If you have a financial issue that you would like to see discussed in this column or have other comments or questions, Robert Stepleman can be reached c/o Dow Wealth Management, 8205 Nature’s Way, Lakewood Ranch, FL 34202 or at rsstepl@tampabay.rr.com. He offers advisory services through Bolton Global Asset Management, an SEC-registered investment adviser and is associated Dow Wealth Management, LLC.
This article originally appeared on Sarasota Herald-Tribune: ROBERT STEPLEMAN: 'Sleeping Soundly Portfolio' does its job
