Portfolio Two Updated August 2011

Portfolio Two is our second longest lived portfolio.  It began in 2004 and the beneficiary contributed $3500 and the trustee contributed $7000 for a total of $10,500, against a current balance of $11,037.  Like the other portfolios it was up higher earlier in the year but has now settled down a bit after the recent stock market gyrations.  The portfolio is up about 5% overall, or 1.2% / year adjusting for the cash inflows by year.

Right now we have a couple of stocks on “watch”.  Like in portfolio one, Urban Outfitters (URBN) hasn’t done too well for us and it doesn’t pay a dividend.  Toyota Motor is also down but that is a well run company that keeps getting hit by recalls and earthquakes and we will consider it but I hate to give up on them since I believe that their management methods are very sound.

Ignoring cash held the portfolio returns about 1.7% a year in dividends.  This number is “net” of foreign withholding (there are a number of ADR’s of foreign stocks in the portfolio).  The dividend return is a critical element of total return in today’s environment, when we receive almost no interest on our cash deposits.

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