Our investment in e.l.f. Beauty (ELF) has been disappointing; but we've been getting a wave of good ...
A "Baseball" Portfolio
05/25/2016 9:00 am EST
Your portfolio should be a lot like a baseball team. I am convinced that you need to try to hit singles and doubles if you really want to have a successful long-term portfolio, explains Jimmy Mengel, editor of Outsider Club.
The leadoff hitter needs to be fast. So let's put a rock-solid singles hitter at the top: ProShares S&P 500 Aristocrats ETF (NOBL).
The leadoff position screams for an ETF. You'll never see absolutely massive gains, but you'll get on base all of the time.
This ETF provides exposure to 50 companies that raised dividend payments annually for at least 25 years by tracking the S&P 500 Dividend Aristocrats.
The index contains a minimum of 40 stocks, which are pretty equally weighted.
You can't do much better for on-base percentage.
And you want to have a solid singles hitter on base to set up the rest of the lineup. Our top pick here is Disney (DIS).
Conventional baseball wisdom says that a number-two batter doesn’t need to be a home-run hitter. What you need is to control.
Disney stock qualifies. It typically doesn't go crazy from one year to the next, but has slowly put together one of the most impressive runs in stock history.
The Sherwin-Williams Company (SHW) is a great number-three hitter: it always delivers over time, and it works great to set up the clean-up hitter.
It’s been churning out paint for over 150 years. And it just agreed to merge with Valspar (VAL) for $11.3 billion. The acquisition gives the company the ability to expand its reach in the Asia-Pacific region, Europe, the Middle East, and Africa.
Also in our line-up McCormick & Co. (MCK), a global leader in spices, seasoning mixes, condiments, and other flavorful products to the entire food industry.
The company has also quietly raised its dividend over the past 91 years! That qualifies it as a dividend aristocrat, in a big way.
I'm sure you are all familiar with Boeing Company (BA), who designs, develops, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide.
And they do it well. The stock is up 72% in the last five years, 63% over ten, and 273% over 20. They have also raised their dividend every quarter for the last ten years.
That's a solid stock towards the bottom of your line-up: while they won't wow you from year to year, their stats build over time and make them a perennial contender.
By Jimmy Mengel, Editor of Outsider Club
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