The World's Greatest Retirement Portfolio
There are lots of reasons people put money into the stock market, but none of them is more prevalent than to save up for retirement. Countless studies have shown that, with a decades-long timeline, there is no wealth generator quite like the stock market.
Knowing that to be the case, I set out this summer to identify 10 stocks that I'd be putting my money into. I'm so confident that these 10 stocks will beat the market over the next 10 years, I've committed more than $40,000 of my own money to them -- and I will donate money to charity if I sell any of them in less than three years.
A check on performance
Take a look at how these stocks held up during the tough summer. The publication dates will take you to my original theses for investing in these stocks.
|Company||Publication Date||Change||Difference Vs. S&P 500 (Percentage Points)|
|PriceSmart (NAS: PSMT)||6/28/11||32.0%||41|
|Activision Blizzard (NAS: ATVI)||7/15/11||5.5%||17|
|Intuitive Surgical (NAS: ISRG)||7/25/11||(7.0%)||7|
|National Oilwell Varco (NYS: NOV)||7/28/11||(26.6%)||(16)|
|Whole Foods (NAS: WFM)||7/5/11||5.6%||19|
|Apple (NAS: AAPL)||7/30/11||(4.8%)||5|
|Johnson & Johnson (NYS: JNJ)||8/1/11||(1.6%)||9|
Source: Yahoo! Finance. Returns include dividend reinvestment.
Though an investment in these companies has yielded only a minuscule 0.95% return, a quick look at the context shows that this is actually quite an accomplishment. Compared with investments in the broader market, this portfolio is absolutely walloping the S&P 500, by more than 12 percentage points!
What's even more impressive is that although there are some dividend stalwarts in the mix -- including Coke and Johnson & Johnson -- this portfolio is heavy on growth stocks such as Whole Foods, Amazon, and PriceSmart. Usually, such stocks are the hardest hit during a market downturn. That hasn't been the case, as the market seems to respect the direction these companies are headed.
Of course, as Foolish investors, we put our money in the market with a three- to five-year timeline. I'm not claiming victory until we hit the summer of 2014, but I'm willing to celebrate a good start.
The tiny Latin American company that could
PriceSmart, by far the smallest of all the companies in this portfolio, is standing head-and-shoulders above the pack. This "Costco of Central America" has recently expanded, having opened up its first location in South America. Though competition will be there to greet PriceSmart, I could see the company forging ahead and establishing a greater footprint in South America.
Furthermore, the company released sales figures for September, and they continue to impress. Net sales increased by an eye-popping 25.5% from September 2010, and when you throw out the two new stores that opened this year, comparable-store sales were up a still-impressive 18.9%.
Could this stock finally break through?
Video-game maker Activision Blizzard has been giving investors fits for years now. It continues to fire on all cylinders as a company -- with the successful releases of the Modern Warfare series as well as World of Warcraft -- but the stock has been stuck between $10 and $12 for two years.
However, it's recently been showing a little bit of traction. As of Friday's close, it was trading for $12.52 -- the first time it's been this high since January. With the shares trading at around 12 times free cash flow, though, I think Activision is still cheap.
What happened here?
Clearly, if there is one loser so far, it's National Oilwell Varco. Though I'm not one to advocate adding to losers, this looks like a compelling long-term play right now. In fact, I recently added it to my Roth IRA as well.
Yes, the stock is tied to the price of oil, but to think that the demand for oil worldwide will be going anywhere but up over the next decade seems absolutely ludicrous to me. National Oilwell just received its first order from a long-awaited buildout of drill ships in Brazil. The $1.5 billion deal could be just the beginning of a global upgrade of an aging drilling fleet.
A sad loss for all investors
Be there any reason to mourn my portfolio, it wouldn't be for National Oilwell's performance. It would be for the loss of one of its great leaders: Steve Jobs.
I'm going to stay away from talking about what this means for Apple the company for now and instead reflect on two things. First, I was surprised at how I reacted to Jobs' death. We usually think of business as a rather impersonal field, but when I got a call from my brother about Jobs, it felt as though I had suffered a grave personal loss.
Second, I think the reaction by others to Jobs' death is a tribute to his ability to bring people together. Perusing my Facebook page, I saw my conservative and liberal friends, my gay and straight friends, my young and old friends, all mourning his loss. I can't think of another business leader for whom I've seen this happen with before. Jobs will be sorely missed.
At the time this article was published Fool contributorBrian Stoffelowns shares of Google, PriceSmart, Activision, Intuitive Surgical, National Oilwell Varco, Coca-Cola, Whole Foods, Amazon.com, Apple, and Johnson & Johnson.You can follow him on Twitter at @TMFStoffel.The Motley Fool owns shares of Coca-Cola, Costco, Activision Blizzard, Johnson & Johnson, Whole Foods, Google, Apple, and National Oilwell Varco, and has written calls on Activision Blizzard.Motley Fool newsletter serviceshave recommended buying shares of Whole Foods, Costco, National Oilwell Varco, Activision Blizzard, Google, Amazon.com, Johnson & Johnson, Coca-Cola, Apple, and Intuitive Surgical, as well as creating a synthetic long position in Activision Blizzard, a bull call spread position in Apple, and a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.