Review of IFO’s Model Portfolio

On Jan. 2, 2012, we began to look at what we called our Model Portfolio. This was an attempt to see what could happen with a RANDOM selection of stocks and pretend to invest a total of $5,000 in shares of those companies.

Of course, this flies in the face of mutual fund promoters who promulgate the fear so many people have of “losing it all” if you “pick the wrong stocks.” Below is a shortened version of our post that January day:

We’ve picked five new stocks with the monkey method. A monkey could have picked them.  Some we had been interested in, but there were some things we didn’t like, like one is a bank! Others we’re just curious about, but haven’t done our brand of research on.  Others have been recommended by market watchers we respect. IOW, pretty random.

We pretended to buy 20 shares of each to get to our goal investment of $5,000. In this case the total was $5,062. The change in price is due to prices that changed from Dec. 30.  We’ll call that the broker’s fee.

Current dividend yield  was 2.2%. Average P/E (price/earnings ratio) is 11.4.   So here it is: the 2012 Model Portfolio Index, the MPI!!

Below this original, is the current price as of May 22, 2015 – almost two and a half years later.

Model Portfolio (2012)

Symbol Price Change
28.60 -0.14 -0.49%
27.56 -0.20 -0.72%
40.36 -0.47 -1.15%
73.09 -0.73 -0.99%
83.49 -0.50 -0.60%
Total (USD) $5,062.00 -40.80  -0.80%
Cumulative  0.00  0.00%

Today, here is what it looks like [our thanks to Yahoo! CEO Melissa Meyer for the typographical changes (NOT!)]:

Model Portfolio $10,350.60

Symbol

Price

Change

% Chg

ADM

52.67 -0.25 -0.47%

WFC

56.00 -0.01 -0.02%

TEVA

61.05 -0.37 -0.60%

UTX

118.62 -0.50 -0.42%

PPG

229.19 -0.04 -0.02%

We can’t figure out how to get the cumulative numbers to print automatically, but Yahoo!Finance does, indeed, calculate in this order: total of all stocks = $10,350.60, $loss for the day was $23.40, on an investment of $5,288.60, for total a gain of 104.48%

BTW – this does not include dividends, which would have produced income. We’ll do a separate post on the subject of dividends.

So much for “market risk.” Not to say these prices can’t go down. But a 20% decline would reduce the value of this portfolio to about $8,000. See what I’m saying here? Now get out there and start doing your due diligence. Pick some stocks! Buy them! Watch them! If one goes down faster than all the rest – sell it!

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About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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