Why "The World's Greatest Retirement Portfolio" Continues to Outperform the Market
Two years ago this June, I decided the most honest and effective way to help the world invest better was to publicly show how I go about making decisions for my own retirement portfolio. I promised to invest $4,000 in each of 10 companies.
Since then, my original investment of $40,000 has grown to $53,640 -- or $3,120 more than if I had just invested the money in the SPDR S&P 500 ETF . Read below to see why the portfolio is doing so well and how you can find out which of these 10 are great buys right now.
Company | Publication Date | Change | Vs. S&P 500 (Percentage Points) |
|---|---|---|---|
82.5% | 53 | ||
PriceSmart | 77% | 50 | |
Baidu ** | (15.7%) | (41) | |
Intuitive Surgical | 25.4% | 2 | |
National Oilwell Varco | (14.7%) | (42) | |
Coca-Cola | 26.9% | (1) | |
Whole Foods | 65.9% | 42 | |
Amazon | 29.4% | 4 | |
Apple | 25.8% | 1 | |
Johnson & Johnson | 38.5% | 10 | |
Source: YCharts. Includes dividends reinvested **BIDU replaced ATVI on Sept. 15, 2012. Returns are for the combined positions.
Though the portfolio is actually sitting about two percentage points lower than it was one month ago, it was able to considerably open up a bigger lead over the S&P 500. Two companies in particular helped this portfolio buck the downward trend over the past month.
The first was PriceSmart, a company built from the blueprint of Costco that is taking the warehouse/membership business model to Latin America. It recently announced sales for May, and it showed an impressive 9.8% rise in comparable-store sales. That, combined with the promise of the company's ongoing push into South America, has helped PriceSmart shares beat the index by 7 percentage points this month.
Another company helping out this month was Amazon.com. Though there were no major sales or earnings announcements, it did create some waves when reports surfaced that it would be entering the groceries business. After being test marketed in select Seattle neighborhoods, Amazon is hoping to offer groceries for (surprise, surprise) razor-thin margins and, hopefully, bundle those deliveries with more standard (and higher-margin) offerings. On the month, Amazon shares outpaced the S&P 500 by about 4 percentage points.
Other important news
One stock that hasn't fared so well recently is Apple. The company held its long-awaited Worldwide Developer Conference (WWDC) in early June. Apple announced an iTunes Radio initiative that promises to challenge Pandora, an iWork for iCloud service that will look to unseat Google's Google Docs, and a release of the company's newest operating system, iOS 7.
We'll have to wait and see if any of these developments create lasting value for the company or its customers. In the meantime, the market is still waiting for the release of a new product that proves innovation isn't dead in Cupertino since the loss of Steve Jobs.
Finally, it looks like the market has entered a "wait and see" period with regards to Intuitive Surgical stock. The company has been hit hard this year with charges that its daVinci Surgical Robot doesn't offer a meaningful advantage in hysterectomy operations, its largest market. But after falling almost 20% earlier in the year, the stock seems to be leveling out at about $500 per share.
What are the best buys?
Every month, I pick out three stocks that are the best buys from this group of 10. Keep your eyes open next week, when I'll tell you what those three stocks are.
Meanwhile, it's worth reading up on what Apple has been up to and what its future could hold. The company has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.
The article Why "The World's Greatest Retirement Portfolio" Continues to Outperform the Market originally appeared on Fool.com.
Fool contributor Brian Stoffel owns shares of Apple, Google, Coca-Cola, Johnson & Johnson, Amazon.com, Baidu, National Oilwell Varco, Whole Foods Market, Intuitive Surgical, and PriceSmart. The Motley Fool recommends Coca-Cola and PriceSmart. It recommends and owns shares of Amazon.com, Apple, Baidu, Costco Wholesale, Google, Intuitive Surgical, Johnson & Johnson, National Oilwell Varco, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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