A 10-Stock Retirement Portfolio That's Whipping the Market
Two summers ago, I began an investing journey in full sight of our Foolish audience. Putting $40,000 of my own retirement money on the line, I picked 10 stocks to invest my money in.
Since then, seven out of 10 of those picks are outperforming the market. The lump sum has grown to $58,600. That's $4,360 -- about 11 percentage points -- more than I would have made by investing that money in the S&P 500, including dividends reinvested.
Below, you can see what those 10 stocks are, why the portfolio is doing so well, and which company from the group I think is an excellent buy at today's prices.
Company | Publication Date | Change | Performance vs. S&P 500 (percentage points) |
|---|---|---|---|
83.8% | 45 | ||
Pricesmart | 93.9% | 57 | |
Baidu | 39% | 5 | |
Intuitive Surgical | (7.4%) | (40) | |
National Oilwell Varco | (1.2%) | (37) | |
Coca-Cola | 21.9% | (15) | |
Whole Foods | 91.8% | 59 | |
Amazon | 47.7% | 10 | |
Apple | 49.2% | 15 | |
Johnson & Johnson | 46.2% | 9 | |
Source: YCharts.
Two stocks lifting the portfolio
While it's easy to see which of these stocks have done the heavy lifting since the portfolio's inception, there are two that stick out as having an outsized influence over the past few months.
BIDU Total Return Price data by YCharts.
On several occasions, I've opined about whether or not Apple post-Jobs still had the innovative edge required to lead the technology field. Following Apple's announcement that the pricing strategy for the iPhone 5c and 5s might not incentivize profitable consumer decisions, I worried still.
And yet it seems Apple is more plugged in to customer demands than I thought. The company sold 9 million 5c units during their first weekend on the market. That, combined with updated guidance from the company that pointed to more revenue than expected, has helped the company bounce almost 25% since mid-summer.
Baidu, the Chinese search giant, has been the other big winner. It seemed like nothing could move the stock price higher for months. That is, until company announced that it had acquired China's largest third-party app distribution platform, 91 Wireless.
That moved signaled that Baidu was serious about monetizing mobile and becoming a more serious player in the field. Though competition is still a threat in the form of Qihoo 360, Baidu flexed its financial muscles with the purchase and reminded folks on Wall Street that it has far, far more cash on hand than any of its direct competitors.
This month's best buy
Though those two companies are certainly still worthy of further research, neither made the cut as this month's pick for the best buy from this portfolio. Instead, that designation goes to Google.
What big news makes Google such a great buy right now?
Actually, there isn't any. The company has been relatively quiet since announcing earnings. Analysts continue to harp on the fact that costs-per-click are still declining. That's fair, but when you take the growth in overall clicks into consideration, it's not that alarming.
More importantly, the company continues to defy the logic of pigeonholing it into any one industry category. While continuing to refine its core search engine, Google has been grooming its Moto X smartphones to be the first in a family of smartphones, and even investing in biotech start-ups.
Innovation is baked into the DNA of the company, and it has so many different potential avenues to remain profitable and relevant in the future that it dizzies the mind. I'm willing to pay a hefty premium for that type of innovation. That's why today's non-GAAP price-to-earnings ratio of under 22 and price-to-free-cash-flow ratio of 24 seems like a long-term steal to me.
Google's Secrets Could Make You Rich
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The article A 10-Stock Retirement Portfolio That's Whipping 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 Amazon.com, Apple, Baidu, Coca-Cola, Google, Intuitive Surgical, Johnson & Johnson, National Oilwell Varco, PriceSmart, and Whole Foods Market. The Motley Fool owns shares of Amazon.com, Apple, Baidu, 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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