Hits and Misses – Conservative Portfolio

Conservative While the purpose of the blog is not to necessarily “beat the market”, it is always nice to have winning choices in one’s account. The primary tenor here is to provide investors with ideas to consider and then readers need to research further to see if the candidates are appropriate for their needs . With that said, let’s see what transpired for the conservative list:

      ABB, Ltd. – although negative since originally introduced – came through with a total return last year of about 20%, thanks in part to its handsome 3.5% yield. Colgate-Palmolive, however, failed to impress and was down 3.1% for the year, but the 2.4% dividend tempered the pain a bit. Colgate is ahead, however, since joining the portfolio by about 70%. CVS Health, while up 154% from where we started in 2010, had a dismal second half of the year and gave up around 20% in 2016 despite hitting a high of $106.67 in May. Ag machinery producer Deere & Co. appears to be on the mend with a possible bottom in farm equipment purchases and sported a nearly 33% advance plus a 2.3% yield. Danaher, after spinning off its industrial products to form Fortive, provided readers with a nice 10% bump this past year, adjusted for the additional shares they received in Fortive. FTV, is up about 15% since the distribution in June. FMI International Fund lagged primarily due to a slowdown in China along with fallout from the Brexit vote in Europe. FMIJX was ahead only 5.45% for 2016, but beat the comparable MSCI EAFE international stock index, which shed 3.7% on the year. 

       The iShares Gold Trust fluctuated with gold prices, but managed to gain 8.3% from when it started the year and remains a good hedge on inflation fears and the stronger dollar. 3M Co. provided conservative investors with a 20% total return in 2016, despite currency headwinds and a weak global economy. Oracle did not live up to expectations and its transition from server-based licensed software to a cloud business model will take a bit longer for it to get significant result to the bottom line. Shares of ORCL gained only 4% last year and paid out dividends of another 1.6%. With energy prices recovering in the second half of the year, oil services equipment provider Schlumberger rewarded investors that were willing to hold on during the slump with a total return of about 23%. Likewise, United Parcel Service was able to get back on solid footing and rose over 18% in price over the past 52-weeks and paid out another 2.7% in dividends. Finally, Verizon Communications had a nice post-election rally carrying the stock higher with a total return of 18.4%.

       Except for Colgate-Palmolive and CVS Health, the other blue-chip choices on the list provided decent positive returns as a group. Tomorrow I will look at the winners and losers in the income portfolio.

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