Introducing Ben’s New Portfolio
Many of you will recall that I used to track a portfolio here on ModernGraham. Unfortunately, the last time I checked the portfolio was November 6, 2006. As a result, I’ve decided to start over. This mock portfolio will be based on $100,000, and will be entirely based on companies I feel strongly about and strategies I have in mind. On the first Thursday of every month, I plan on reviewing the portfolio and making any changes that seem necessary.
You can see the portfolio in this google spreadsheet.
When constructing the portfolio, I began by deciding on asset allocation. I knew I wanted to stick to companies that we have in our database with a target allocation of 10% per company. However, I also feel that the market is currently well overbought and I am hesitant to put much into equities. As a result, the first decision I made was to start out with 50% in bonds.
Specifically, I am a fan of the iShares Barclays 10-20 year treasury bond fund (TLH). I believe this is a strong bond fund to invest in at this time and hopefully it will hold up well once the market starts coming back down. I started with a purchase of 312 shares of TLH, for a cost of $35,034.48.
Next, I wanted to invest the remaining 15% of the bond portion. I am a fan of high yield bonds – and the iShares fund for that is HYG. Currently it yields about 9%. It tends to move with equities so it isn’t a great place to diversify away, but I like the yield too much to stay out of it. I purchased 173 shares for $14,938.55.
On to the equity portion. I’m a big fan of National Presto Industries (NPK). I absolutely love their balance sheet, history of growth, and dividend rate (about 6.4% yield). I bought 115 shares for $9,948.65.
Olin Corp (OLN) is another great company. Strong balance sheet and another strong dividend (about 4.5% or so). I have concerns about their earnings, but I think they can bounce back from a rough 2009. I bought 573 shares for $9,993.12.
Emerson Electric Company (EMR) is an intriguing prospect. It looks a bit better on the defensive investor side than the enterprising investor, because of a current ratio below 1.5. However, it is strong everywhere else. I bought 250 shares for $10,020.00.
B&G Foods Inc (BGS) was next. Probably the riskiest company of the 5 I have in this portfolio. Good balance sheet, but questionable earnings. Hopefully it will hold up and do well. It has a nice dividend that I hope will not be cut (about 8.3%). I bought 1221 shares for $9,999.99.
Finally, I bought International Shipholding Corp (ISH). Another potentially risky choice, ISH had some negative years in the last 10 and failed to pass the defensive investor tests. However, I believe it has found stability and like its 6.5% dividend. I bought 325 shares for $10,013.25.
That’s it for this portfolio update. Next month we’ll see how these have done and possibly have some transactions to either rebalance or change allocations.
Photo provided by zzzack.
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