Portfolio Allocation – Income

DividendsToday I am making some minor changes to the Income Portfolio allocation. You may want to read the introduction to yesterday’s posting regarding asset allocation in general. As for the income-minded, I am making small additive adjustments to iShares Telecom, Rogers Communications and Verizon Communications. I believe the telecom stocks in general will be solid performers for 2014, while utilities will underperform especially when the Federal Reserve tapers its bond buying program. Therefore I am reducing by one percentage points each for Consolidated Edison and the Select SPDR Utilities ETF. DuPont should benefit from an improving economy and its strong position in agricultural products and chemicals and moved up to 10% of the pie and Johnson & Johnson moved up 1 notch to 11%, as the shares should benefit from a rising healthcare dollar. I reduced the slice for the ETRACS Alerian MLP to make some increases to the other candidates, although I am still bullish on the energy pipeline and infrastructure category in general. Following Royal Bank of Canada’s earnings release earlier today, which beat analysts’ estimates, I moved RY down from 11% of the pie to 10% as the shares have had a nice run-up since joining the list and may take a breather for now. Likewise, I moved Kimberly-Clark down a notch as KMB shares are also at record levels. I’ve maintained my allocations for Intel and McDonald’s. Take a look:

 Income

My next allocation posting will cover the Aggressive Portfolio.

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