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Monday, January 2, 2012

timeless portfolio review

As 2011 comes to a close, its time to review the 'timeless portfolio'.

(Since last year, the blog has seen a spike in monthly page views. About +170%. Don't know if its bots or actual people, but if you are actual people reading this, THANKS! The link to its performance is to the right of the blog, under "Links".  I created the portfolio as a means to potentially outperform the market with minimal trading activity. See here.  Since its creation, I have only made one change per year. It is a stark contrast to how I usually trade.)

The portfolio ended the year with a +2% gain from last year.

The only change I made this year was to unload KMP. KMP usually trades with a yield of mid 6%. It is currently yielding at its lower range low/mid 5%.  Because of this, I swapped it with another steady yielder, VZ.  VZ is currently trading near its 5 year average. (If VZ begins to approach its lower-end yield range of high 3/low 4%, I will capture the stock appreciation and walk away from this one too.) 

The biggest under performers were F and BGCP.  I was expecting more of a dividend out of Ford this year to keep its stock elevated, but I guess management was being more prudent with their cash due to the economic climate. 

BGCP was and is knocked in sympathy from the EU crisis. I doubt I will let BGCP go, but if Ford does not give more of a dividend in 2012, I will most likely replace it with DD. (Especially if DD ever approaches the high 30s from a shaky market.)

Since the inception of the 'timeless portfolio' the two year performance is +21.4%. In relation to the market, the SP500 is up around 12% since 2010, and basically flat for 2011.

Through the lens of my short-term trading perspective the performance is not great. But in perspective to this year's market craziness and in relation to the over all market, I do not think the performance is that bad.

Happy New Year, and Happy Trading!

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