Portfolios four and five are both three and a half years old. The beneficiary has contributed $2000 and the trustee has contributed $4000, for a total of $6000. The value of the portfolio is $6848, for a gain of $848, or 14%, which is 5.4% / year when adjusted for the timing of contributions. You can see the detail on the right in the links or go here.
The portfolio is generally doing well. Alcoa, the major US Aluminum company, is down over 25% from our original purchase price and has a relatively small dividend of 1.4% / year. While the company is well run, it faces heavy competition world wide in a very tough market. We will watch the company and sell if it doesn’t improve. Another company on the watch list is Riverbed Technologies, which makes technology security and optimization devices. The company is currently trading at a lower price then we paid for it, although it did spike above for a brief time. Riverbed purchased Opnet for $1B, using cash and debt. Generally Riverbed was thought of as a company that would be a likely acquisition candidate by larger technology companies and to the extent that Riverbed is purchasing other companies, that would indicate that they intend to “go it alone”. We will watch Riverbed and likely sell if it goes above our purchase price or trends down.
There were no sales this year and thus no capital gains or losses, and $190 of dividends were paid.
For both portfolios four and five, since inception interest rates have been remarkably low and the interest that they have earned is minuscule (less than $1). On the other hand, I have been able to use “free trades” for each account and no fees have been assessed on the account, meaning it essentially exists for free. Compared to the earlier portfolios in earlier years, the benefits of “free” trading more than offsets the impact of receiving effectively zero interest on cash on hand.