Portfolio Allocation – Conservative

Conservative  Today I am making a few minor adjustments to the conservative portfolio allocation since my posting back in March. By-and-large, I am staying focused on the large capitalization stocks which make up the bulk of the list. However, I have become somewhat concerned about Europe and other international markets and am going to cut the allocations for ABB, Ltd. from 9% to 7% and the Dodge & Cox International Stock Fund to 8% from 10%. With a  26% total investment in Eurozone equities, another 15% in the UK and about 16% in other European countries outside the Zone, the fund has some short-term exposure. Nonetheless, I believe Europe’s economy will eventually improve, especially if the Russian-Ukraine volatility subsides. ABB has a wide presence outside of the continent and DODFX has a well diversified portfolio in other regions of the world and are both worth holding. I am also reducing Oracle’s slice of the pie from 8% to 7% as it transitions from a server-based software supplier to cloud subscription services and digests the moves in top management. But here again, I believe ORCL has decent long-term prospects and deserves a spot on the list for the long haul. Coca-Cola has had a nice run of late moving into record high territory at $42.16, but upside from here may be fizzing out a bit and I am reducing the allocation for Coke to 8% from 9%. On the plus side I am increasing shares of 3M Co. one percentage point to 9%, as the growth picture for MMM is quite alluring. I bumped up Schlumberger from a 9% allocation to 11% despite weakness in oil. I believe that SLB’s superior position in the oil service space and its overall financial strength, strong cash flows and ongoing dividend increases provide for a core energy holding in the years to come and shares can be purchased on weakness. I like what I am seeing at CVS Health despite its recent price surge over the past several months and the shares remain a decent value at 18 times consensus 2014 earnings and 16 times estimates of $5.06 per share for fiscal 2015; hence a move to 10% of a conservative portfolio from 9%. I am widening Danaher Corp. a notch to 10% as it slowly reacts to an improving economy within its industrial businesses and should fare well with its new dental sector acquisition. And finally, I am confident that United Parcel Service will participate in the upcoming holiday-buying season and short of a recurrence of last year’s missteps, UPS should do well in reaping the benefits of increased Internet shopping and it tacks on a 1% increase of the pie. I am leaving Colgate-Palmolive, Deere & Co and the iShares Gold Trust at their March 8%, 7% and 5% shares, respectively. Take a look:

Conservative

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: