April 2014 Investment Update

April 2014 report

 

triphoto

Nearing the finish line – less than 2 months to go

April Results:

Markets:

It was another up month on the markets with the S&P and Dow up 2/3 % and 3/4 % respectively.  The Dow and S&P have now recovered all of the January losses.  The TSX had a good month of over 2% bringing the year to date to a 7 1/2 % gain.

My Portfolio:

My Portfolio is up between 2% and 3% for the month with a YTD of just over 8%.

Here is my stocks and their YTD gains and losses.

 

ADP -3.51 KMB 7.46 PWF -3.28
BCE 6.09 KO -1.26 RDS.A 10.48
BMO 6.69 LMT 10.41 T (ATT) 1.54
CM 7.72 MCD 4.48 T (Telus) 5.63
COP 5.18 MMM -0.83 TD 5.46
DD 3.62 MO 4.48 TOT 16.27
ENB 13.96 MRK 17.00 TRI -1.24
FTS 5.75 NA 2.92 TRP 6.09
GWO -5.83 NVS 8.16 UL 8.59
INTC 2.81 PEP 3.56 VZ -4.90
ITW 1.37 PG 1.40 RY 3.89
JNJ 10.59 PM -2.15

Although I use a buy and hold strategy, the average age of the stocks in my portfolio is only 3.42 years. That is because I am adding to the holdings regularly and purging when necessary.  Of these stocks that I hold, the average annual return has been 11.65% plus dividends of between 3 and 4 %.  What drags down my overall portfolio return is the cash that sits idle awaiting buying opportunities.

Going back and doing a thorough analysis of my historical purchases and sales over the last 10 years, my average return on the stocks that I have sold was 4.45% (weighted by amounts) plus dividends of over 3%.  The reason I sold them was they no longer fit the criteria (as it evolved) or were losers (eg BP after the oil spill in the Gulf of Mexico).

Here are the stocks I have bought and sold over the past 10 years:

Some of them provided excellent returns (eg ITYBY and EONGY) while others were big losers (eg C, BP).  Most of them provided an adequate return but no longer fit my evolving strategy.

BP GIS SDY
BUD HD SPY
C IDARQ SYY
CNR ITYBY TIH
DIS LLY VVC
ECA POW WFC
EONGY PSX WMT
GE RSP

 

 

Sell in May?

It’s that time of year again.  With a buy and hold strategy, I would not advocate a complete purge of any portfolio. However if there are stocks that you want to cull out of your portfolio, this is a good a time as any to take the current profits and convert to cash to await a later buying opportunity.  With the continuous run-up in the market, we are still long overdue for a real correction.  It looked like we were having one late last year, but it wasn’t enough of a drop to call it a correction.  We are heading into the summer doldrums and it is probably not a good time to buy, but there still may be a few good buys out there.

Here are some articles that talk about the “Sell in May” philosophy.

http://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp

http://www.cnbc.com/id/101630987

http://www.cnbc.com/id/101630493

http://online.barrons.com/news/articles/SB50001424053111903843804579529360881005886

 

 

Below are links to investing articles that you might find interesting:
More Investing Articles

Warren Buffet’s recent performance – not as great.

Housing:

The housing boom of the past decade has given young adults a whole lot of debt and some pitiful gains in net worth.

The twenty- and thirtysomethings of Generation Y who are entering the market today are in for worse treatment. A mindset for those who choose to buy a house: It’s about lifestyle, not making an investment.

And other articles on housing:

HERE

and

HERE

Articles looking at international stocks (see my commentary from last month)

Go International – follow up article

More reason to be wary of the push into emerging markets.

Here is the current suggested stock list:

Company Ticker Dividend Yield Dividend Growth 10-Year Current PE Ratio
3M Company MMM          2.50              6.50            18.80
Abbott Labs. ABT          2.29              8.50            18.04
AT&T Inc. T          5.36              4.50            13.22
Automatic Data Proc. ADP          2.58            13.50            24.17
Baxter Int’l Inc. BAX          2.71              8.50            14.43
Boeing BA          2.30            10.00            20.58
Bristol-Myers Squibb BMY          2.84              2.00            25.61
Chevron Corp. CVX          3.22              9.50            11.23
Coca-Cola KO          3.07            10.00            19.57
Colgate-Palmolive CL          2.23            12.50            26.26
ConocoPhillips COP          3.71            13.50              9.85
Deere & Co. DE          2.17            13.00            11.05
Du Pont DD          2.80              2.00            15.83
Emerson Electric EMR          2.48              7.00            18.29
Exxon Mobil Corp. XOM          2.64              8.50            12.97
Gen’l Dynamics GD          2.25            13.00            16.21
Home Depot HD          2.36            19.50            18.55
Int’l Business Mach. IBM          2.10            19.00            11.73
Intel Corp. INTC          3.36            26.50            14.38
Johnson & Johnson JNJ          2.64            12.50            17.57
Kimberly-Clark KMB          3.08              9.50            18.96
Lockheed Martin LMT          3.46            23.50            15.89
McDonald’s Corp. MCD          3.25            25.50            17.30
Medtronic, Inc. MDT          2.02            16.00            14.70
Merck & Co. MRK          3.06              1.50            17.02
Northrop Grumman NOC          2.05            10.50            13.44
Novartis AG ADR NVS          3.22            16.00            21.52
Occidental Petroleum OXY          3.00            14.50            13.74
PepsiCo, Inc. PEP          3.06            13.50            18.80
Pfizer, Inc. PFE          3.39              6.00            18.61
Procter & Gamble PG          3.17            11.00            18.66
Raytheon Co. RTN          2.52              9.50            14.47
Royal Dutch Shell ‘A’ RDS/A          4.96              7.50            13.36
Smucker (J.M.) SJM          2.45            10.50            17.14
Texas Instruments TXN          2.48            25.00            24.36
Total ADR TOT          4.82            15.50            10.33
Travelers Cos. TRV          2.48              4.50              9.30
Unilever PLC ADR UL          3.35              9.00            19.21
Verizon Communic. VZ          4.58              2.50            13.82
Wal-Mart Stores WMT          2.45            18.00            15.06
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About borgford

Feel free to contact me with questions: brianborgford@hotmail.com
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