Stocks to choose from for 2018:
- CME Group (CME) – a financial firm that trades and clears futures products and has a high dividend (they have an annual dividend plus a special year end dividend of 3.5%+ in total). They make money from trade volume which tends to increase in times of volatility or disruption in the markets, and are thus kind of a “hedge”
- PayPal (PYPL) – PayPal spun off from eBay and makes more money as the world moves to digital payment methods from cash. They also own Venmo which they have yet to monetize (existing stock owned by Portfolio One)
- Union Pacific (UNP) – Union Pacific is a large and well-run railroad company (existing stock owned by Portfolios Five and Six)
- Electronic Arts (EA) – An American video game developer that has been hit lately but could be a bet on the potential of this sector and streaming
- Inditex (IDEXY) – this Spanish company is known in the USA as “Zara” and is a leader in “fast fashion” and integrating e-commerce with direct retail
- Alibaba (BABA) – the Chinese e-commerce giant has been growing and expanding into different domains (existing stock owned by Portfolios Three and Seven)
- Taiwan Semiconductor Manufacturing Company (TSM) – this manufacturer of semiconductors counts Apple as a large customer and has been doing very well for many years (existing stock owned by Portfolio One)
- Infosys (INFY) – Indian outsourcer and technology company has been doing well and benefits from the weaker Indian currency (existing stock owned by Portfolios One and Three). Note – this stock just split 2/1 effective 9/12 so the price history will look strange if you see it online
- Gold ETF (IAU) – this ETF tracks the price of gold. Gold does not provide a dividend but could be a hedge against inflation or disruption
Between the eight portfolios, there are almost 40 different stocks to follow. Generally, we select “new” stocks rather than re-recommend existing stocks. However, for this round, we will have some “new” stocks but also continue to recommend some existing stocks that the portfolios can choose from. This will slow the overall growth of stocks across all the portfolios which will make it simpler to track.
We will continue to recommend a mix of US and foreign stocks to choose from, although each portfolio can select whatever they’d like (they don’t have to split their investments equally between both). Recently the US dollar has gone up, resulting in (relatively) poorer performance for foreign stocks. However, this can change and these are long-term portfolios so we recommend US and foreign stocks rather than taking an effective “position” on the future direction of US currency (i.e. if you thought the dollar was going up indefinitely you would buy US based assets exclusively). Folks often fail to remember the past, when the US dollar fell for years against many different currencies.