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Portfolio Overview
The Best Stocks for the Rest of 2011
By Jim Royal June 22, 2011
Do you remember kicking yourself for not buying a stock when it was cheap, only to watch it move higher? We've all been there. But now's your chance to buy some quality companies at good valuations, and the five names I suggest below all pay dividends, too.
Investors are running for the hills
Just how did
these bargains come about? Simple: Many investors are caught up in a
blind panic. While that's exactly the best time to buy, remember that
investors are running scared for a reason -- sometimes a good one.
Below, I highlight three of the largest causes for concern.
The past six or seven weeks have been rough for us investors. The market seems to have sunk inexorably lower, hit by a triple whammy of slowing growth, a bickering Congress, and the end of Quantitative Easing 2.0 -- the Federal Reserve's controversial program of buying assets in order to stimulate the economy.
The end of QE 2.0: The market's move down coincided closely with the Fed's announcement that it wasn't planning a third round of quantitative easing. With investors expecting less liquidity coming into the market to support stock prices, they sold off stocks.
A divided Congress: The 2009 stimulus spending has worn off, leaving Congress fighting over a balanced budget rather than getting the economy back on track in the face of 9% unemployment, which shows no signs of serious improvement.
Slowing growth: With housing continuing to move lower, many consumers are still overwhelmed by debt, leaving them unable to ramp up their own spending. With Congress unwilling to open the purse for more stimulus spending (see Point 2), the market's not seeing the bump in aggregate demand that it wants.
Don't lose hope
Now, those are all reasonable
concerns, and they all could continue for much longer. Who knows? But
Foolish investors like us know that lower prices mean an opportunity to
find bargain-priced stocks. You should be looking for stocks that can
thrive in a difficult economy. It's even better if they can do well precisely because of the difficult macro picture, as many stocks below can.
So below, I present five stocks that I think will continue to do well, regardless of the concerns above. The stocks are reasonably priced, offer very attractive dividends, and even give you great downside protection as some investors grow concerned about the rest of 2011.
|
Company |
Dividend Yield |
Valuation |
|---|---|---|
| Annaly Capital (NYSE: NLY ) | 13.5% | P/B = 1.17 |
| Wal-Mart (NYSE: WMT ) | 2.8% | P/E = 12.3 |
| Exelon (NYSE: EXC ) | 5.1% | P/E = 11.1 |
| Brookfield Infrastructure Partners (NYSE: BIP ) | 5.1% | P/FFO = 13.4 |
| McDonald's (NYSE: MCD ) | 3% | P/E = 17.3 |
Source: Capital IQ, a division of Standard & Poor's. P/B = price/book, P/E = price/earnings, P/FFO = price/funds from operations.
Each company offers a solid dividend and the potential for even more in the years ahead.
Asset Allocation
| Symbol | Category/Sector | Target Weight |
|---|---|---|
|
NLY Annaly Capital Management, Inc. |
EQUITY | 20% |
|
MCD McDonald's Corporation |
EQUITY | 20% |
|
EXC Exelon Corporation |
EQUITY | 20% |
|
BIP Brookfield Infrastructure Partners L.P. |
EQUITY | 20% |
|
WMT Walmart Inc. |
EQUITY | 20% |
Historical Performance
Fools 5 Stocks for the rest of 2011 Historical Returns
| Name | YTD Return | 1Yr AR | 3Yr AR | 5Yr AR | 10Yr AR | 15Yr AR | 20Yr AR | Inception |
|---|---|---|---|---|---|---|---|---|
| Fools 5 Stocks for the rest of 2011 | NA | 25.23% | 9.91% | NA | NA | NA | NA | 10.17% |
| VFINX (VANGUARD 500 INDEX FUND INVESTOR SHARES) | NA | 18.33% | 0.63% | 0.71% | 2.60% | 6.02% | 8.03% | -1.89% |
| VSMGX (VANGUARD LIFESTRATEGY MODERATE GROWTH FUND INVESTOR SHARES) | NA | 11.76% | 2.77% | 2.80% | 4.77% | 6.74% | NA | 0.92% |
| Ticker/Portfolio | Last 1 Week | 1 Yr | 3 Yr | 5 Yr | 10 Yr | 15 Yr | 20 Yr | Inception | YTD | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996 | 1995 | 1994 | 1993 | 1992 | 1991 | 1990 | 1989 | 1988 | 1987 | 1986 | 1985 | 1984 | 1983 | 1982 | 1981 | 1980 | 1979 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Annualized Return (%) | Fools 5 Stock...t of 2011 | NA | 25.23 | 9.91 | NA | NA | NA | NA | 10.17 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | 11.43 | 16.49 | 12.37 | -9.67 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| VFINX (VANGUA...R SHARES) | 3.57 | 18.33 | 0.63 | 0.71 | 2.60 | 6.02 | 8.03 | -1.89 | NA | 24.84 | 26.12 | -18.24 | 28.53 | 18.74 | 31.33 | -4.55 | 21.66 | 11.83 | 1.23 | 13.52 | 32.17 | 15.82 | 1.96 | 14.91 | 26.52 | -37.02 | 5.39 | 15.64 | 4.77 | 10.74 | 28.50 | -22.17 | -12.03 | -9.05 | 21.08 | 28.62 | 33.18 | 22.87 | 37.45 | 1.18 | 10.15 | 8.24 | 32.05 | -3.33 | 28.37 | 14.92 | 3.97 | 9.30 | 22.60 | 3.67 | 17.07 | 19.25 | -8.55 | 27.89 | -2.07 | |
| VSMGX (VANGUA...R SHARES) | 2.65 | 11.76 | 2.77 | 2.80 | 4.77 | 6.74 | NA | 0.92 | NA | 10.28 | 15.51 | -16.01 | 10.08 | 13.59 | 19.30 | -6.28 | 14.86 | 7.09 | -2.21 | 6.38 | 14.73 | 9.78 | 0.12 | 13.14 | 20.35 | -26.49 | 7.21 | 13.30 | 5.68 | 11.76 | 22.40 | -10.34 | -4.78 | 1.27 | 14.09 | 21.59 | 17.90 | 10.77 | 26.58 | 2.04 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |
| Sharpe Ratio | Fools 5 Stock...t of 2011 | NA | 0.71 | 0.87 | NA | NA | NA | NA | 0.31 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | 0.69 | 1.32 | 0.61 | -0.28 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| VFINX (VANGUA...R SHARES) | NA | 0.59 | 0.94 | 0.83 | 0.66 | NA | NA | 0.45 | 0.41 | 1.67 | 1.73 | -0.82 | 2.17 | 0.53 | 2.39 | -0.35 | 3.16 | 0.89 | 0.08 | 1.19 | 2.90 | 1.25 | 0.08 | 0.82 | 0.97 | -0.92 | 0.14 | 1.22 | 0.24 | 0.88 | 1.63 | -0.90 | -0.68 | -0.60 | 0.97 | 1.23 | 1.61 | 1.62 | 4.31 | -0.19 | 0.90 | 0.57 | 1.91 | -0.55 | 1.71 | 0.59 | -0.01 | 0.30 | 1.47 | -0.26 | 0.79 | 0.63 | -1.30 | 1.17 | -3.84 | |
| VSMGX (VANGUA...R SHARES) | NA | 0.82 | 0.73 | 0.60 | 0.49 | NA | NA | 0.51 | 1.05 | 0.87 | 1.45 | -1.22 | 1.32 | 0.70 | 2.77 | -0.87 | 3.75 | 0.83 | -0.26 | 1.01 | 2.16 | 1.23 | 0.01 | 1.18 | 1.12 | -0.98 | 0.39 | 1.34 | 0.49 | 1.49 | 2.09 | -0.75 | -0.59 | -0.24 | 1.06 | 1.56 | 1.56 | 0.91 | 4.18 | 4.60 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |
| Standard Deviation(%) | Fools 5 Stock...t of 2011 | NA | 14.63 | 17.34 | NA | NA | NA | NA | 22.86 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | 15.17 | 12.40 | 19.99 | 36.79 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| VFINX (VANGUA...R SHARES) | NA | 19.83 | 17.23 | 17.43 | 18.48 | NA | NA | 18.10 | 24.35 | 12.67 | 13.09 | 24.19 | 13.11 | 34.69 | 12.48 | 17.11 | 6.68 | 13.11 | 15.51 | 11.39 | 11.07 | 12.74 | 23.36 | 18.07 | 27.22 | 40.99 | 16.02 | 10.04 | 10.29 | 11.10 | 17.04 | 25.96 | 21.55 | 22.20 | 18.17 | 20.48 | 18.21 | 11.77 | 7.77 | 9.92 | 8.83 | 9.93 | 14.69 | 16.06 | 13.09 | 17.07 | 33.80 | 16.55 | 11.67 | 12.80 | 13.62 | 18.09 | 14.61 | 16.53 | 23.80 | |
| VSMGX (VANGUA...R SHARES) | NA | 10.47 | 10.12 | 10.09 | 10.41 | NA | NA | 11.48 | 12.44 | 7.69 | 8.26 | 14.34 | 7.62 | 19.08 | 6.43 | 8.81 | 3.80 | 8.31 | 8.51 | 6.28 | 6.80 | 7.99 | 14.68 | 11.10 | 18.01 | 27.95 | 10.37 | 7.43 | 6.96 | 7.25 | 10.38 | 15.37 | 12.42 | 12.30 | 10.07 | 11.65 | 9.10 | 7.74 | 5.41 | 15.57 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |
| Draw Down(%) | Fools 5 Stock...t of 2011 | NA | 8.67 | 20.40 | NA | NA | NA | NA | 29.57 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | 8.67 | 9.23 | 20.40 | 29.10 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| VFINX (VANGUA...R SHARES) | NA | 18.76 | 18.76 | 24.59 | 33.83 | NA | NA | 55.25 | 18.76 | 8.45 | 9.97 | 24.59 | 5.14 | 33.83 | 6.63 | 19.40 | 2.60 | 10.29 | 12.05 | 7.30 | 5.59 | 9.60 | 18.71 | 15.66 | 27.17 | 47.73 | 9.88 | 7.47 | 7.01 | 7.47 | 13.79 | 33.02 | 29.18 | 16.55 | 11.81 | 19.20 | 10.79 | 7.45 | 2.50 | 8.48 | 4.84 | 5.63 | 5.57 | 19.19 | 7.35 | 7.24 | 33.08 | 11.63 | 7.51 | 10.58 | 7.02 | 13.21 | 15.61 | 16.03 | 2.40 | |
| VSMGX (VANGUA...R SHARES) | NA | 9.62 | 12.88 | 22.29 | 22.43 | NA | NA | 41.18 | 9.62 | 4.17 | 8.15 | 21.74 | 3.53 | 22.43 | 3.12 | 11.47 | 1.14 | 6.20 | 8.34 | 4.70 | 5.67 | 6.27 | 12.90 | 8.64 | 19.61 | 36.81 | 6.11 | 6.13 | 4.74 | 5.89 | 8.91 | 20.06 | 17.93 | 8.77 | 6.26 | 11.99 | 6.02 | 4.75 | 1.82 | 1.89 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |
| Yield(%) | Fools 5 Stock...t of 2011 | NA | 3.30 | 5.54 | NA | NA | NA | NA | 6.75 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | 2.37 | 6.84 | 6.46 | 4.57 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
| VFINX (VANGUA...R SHARES) | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |
| VSMGX (VANGUA...R SHARES) | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA |
Calculate Performance
Start date (MM/dd/yyyy)
End date (MM/dd/yyyy)
calculate result (Annualized)
Calculators
Dollar Cost Average Calculator for Fools 5 Stocks for the rest of 2011
Retirement Spending Calculator for Fools 5 Stocks for the rest of 2011
Rolling Returns
Maximum Drawdown
Fools 5 Stocks for the rest of 2011 Maximum Drawdown