Portfolio Four Updated October 2015

Portfolios 4 and 5 are both 6 years old.  Portfolio 4 has $3500 in beneficiary contributions and $7000 in trustee contributions for a total of $10,500.  The current value is $10,892 for a gain of $392 or 3.7%, which is about 0.9% / year.  You can see the details here or go to the links on the right.

The portfolio has several stocks that are on watch.  We have been holding on to Coca Cola Femsa (KOF) which is the Mexican coke bottler but the Mexican currency (Peso) has fallen heavily vs. the US dollar.  Devon Energy (DVN) has been hit hard by the commodity crash, although it is well run and pretty well hedged.  Garmin (GRMN) has also fallen recently on reduced earnings guidance.  Wal-Mart (WMT) is still up significantly from our purchase price but recent earnings guidance was poor and that stock fell too.  Royal Dutch Shell (RDS.B) and Statoil (STO) have also been impacted by falling oil prices, although Shell’s decision to stop arctic drilling is a good one from a financial perspective (the price of oil has made those wells uneconomic).  Seaspan (SSW) has a high price buoyed by a large dividend but that may not be sustainable.


Portfolio Three Updated October 2015

Portfolio three is eight years old, with the beneficiary contributing $4500 and the trustee contributing $9000, for a total of $13,500.  The current value is $13,243 for a loss of ($256) or (1.9%), which works out to an annual return that is slightly negative (0.4%) / year.  See the details here or use the links on the right.

The portfolio has had some stocks move against us lately.  Wal-Mart (WMT), an historically strong performer, recently came out with 3 year stock guidance that showed low growth and the stock went down.  Wynn (WYNN), a gambling company with strong interests in China, was also adversely hit by the Chinese governments’ crack down on money laundering and VIP gamblers.  Exxon-Mobil (XOM), the energy giant, has gone down tied with the commodity bust.  Yahoo (YHOO) is up overall but down from recent highs and is mainly a value play on its Alibaba (BABA) stake.

We will look at selling some of these stocks as part of our 2015 new stock purchase planning.

Portfolio One Updated October 2015

Portfolio One is our longest lived portfolio, at 14 years.  It started right after 9/11 and has tracked the ups and downs of the stock market since then.

The beneficiary has contributed $7000 and the trustee $15,500 for a total of $22,500.  The current value of the portfolio is $34,648, a gain of $12,148 or 54% since inception, at a rate of about 5.5% / year.  To date dividends have contributed over $5000 towards the value of this portfolio.  You can download the portfolio here or go to the links on the right.

For the year to date, the portfolio stocks are down about 7%, compared with the S&P 500 being up 2% and the non-US index down about 6% (in US Dollar terms).  The portfolio is roughly half US and half non US and the increased downturn is due to our concentration in resource stocks and some currencies that depreciated significantly vs. the US Dollar.

There are 19 stocks in the portfolio, with an average value of about $1700.  The largest position is Exxon (XOM) at about $3000 and there are 2 stocks under $1000, Statoil (STO) and Trans-Alta Corporation (TAC).  It isn’t a co-incidence that STO and TAC have been hit by the recent commodity price downturn (Exxon too, although not as much).  The goal would be to have less than 20 or so stocks in the portfolio.

There has been a lot of volatility in the market and we’ve been holding off on selling to see how the dust settles.  We may make some sales prior to reinvesting the new stock selections for 2015.  Items that we are considering for sale are TransAlta (TAC), Yahoo (YHOO), Garmin (GRMN), and Wal-Mart (WMT), although we don’t want to make hasty actions based on short term moves (this mainly applies to Wal-Mart).

Portfolio Four Updated November, 2014

Since we updated portfolios five and six in November it made sense to also update Portfolio Four.  The beneficiary contributed $3000, the trustee $6000 for a total of $9000.  Current value is $11,400 for a gain of $2400 or 26% which is almost 7% / year.  Go here for the detail or to the link on the right.

The same stocks Westpac, Garmin, and Wal-Mart have been major contributors to the gain.

Portfolio Four Updated July 2013

Portfolios 4 and 5 are both almost 4 years old. The beneficiary contributed $2000 and the trustee $4000 for a total of $6000. The current value of the fund is $7186, for a gain of $1186, or 19%, or about 7% / year (when the timing is adjusted for cash flows). You can see the portfolio detail in the links on the right or go here.

Portfolio 4 seems to be doing fine. All the stocks are above their purchase price, with a couple of big winners (Westpac and Wal-Mart) and the portfolio has many stocks that pay significant dividends. Dividends are particularly valuable since there is little or no interest income nowadays with low interest rates.

Last year we sold Exelon when they hit major problems and it looked like their dividend would be cut. The stock hasn’t moved much recently.

Portfolio Four Updated January 2013

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 $7123, for a gain of $1123, or 18.7%, which is about 7% / year when adjusted for the timing of contributions. You can see the portfolio here or go to the links on the right side of the page.

This year we sold one stock that fell significantly in value, Exelon, since the pressure on that stock seemed unrelenting. The remaining stocks are all above the price we paid for them, and we will watch them to see if they become overvalued. Westpac, an Australian bank, has done well bolstered by a strong dividend and the rising Australian dollar (or the falling US dollar, depending on how you look at it) and Wal-Mart, that ferocious US retail competitor.

For taxes, there was one sale for a long-term loss (Exelon) of $236, and there was $209 in dividends paid.

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.