Portfolio One Updated July, 2013

It is summer and almost time to select stocks for 2013, before everyone goes back to school, college, or graduate school. Portfolio One, our longest lived portfolio, has $5500 invested by the beneficiary and $12,500 by the trustee over the last 11 2/3 years, and its current value is $29,290, for a gain of 63%, or just under 8% / year since 2001 (adjusted for the timing of cash flows). Go to the portfolio on the right side or click here for the detail.

The portfolio is generally doing pretty well right now. Our stocks from China, India and South Africa took a bit of a hit because of 1) declining currency vs. the US dollar 2) slow growth in the emerging “BRIC” (Brazil, Russia, India and China) countries. However, they seem to be well run and have a decent dividend so didn’t take too much of a hit.

Of the stocks we’ve sold, most of them haven’t moved up too much, but Amazon continues to move forward, at over $300 / share. This is amazing because the company essentially has no profits but no company has been better able to win over Wall Street with a vision of the future, apparently.

In the past we’ve held on to a lot that had big dips (like EBAY) that came back up later, so it likely evens out over time.

It is important to note the significant positive impact that dividends have on this portfolio. The portfolio has earned almost $3200 in dividends over its life, which constitutes over 25% of total returns. At one point in the dire period of 2008-9 dividends were the only thing keeping us above break even (now we have lots of unrealized gains, too).

We had a few annoying stock splits recently (the “adjusted shares” column has them highlighted in yellow). Stock splits don’t have any economic impact but are intended to make the cost / share more accessible to a retail audience (like this one, I guess).

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