Portfolio Four Updated December 2012

Portfolio Four is in its fourth year of investing (along with portfolio five). The beneficiary invested $2000 and the trustee invested $4000, for a total of $6000. The portfolio is worth $6626, for a gain of $626 or 10%, about 4% / year when adjusted for the timing of cash flows. You can see the portfolio on the left or by going to this link.

Exelon was recently sold because that company is under pressure to cut their dividend based on a change in the underlying utility business model – natural gas has reduced the average amount that power is sold for and Exelon is now making less money as a result. The other stock on negative watch is Nucor, a well run US steel company, whose dividends have offset half the drop in the stock price (which is why we track not only share price changes but also accumulated dividends, as well).

Winners include the Australian bank Westpac with a high dividend that has benefited from the increase in the value of the Australian dollar vs. the US dollar, and Wal-Mart the low price retailer that continues to perform well.

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