Author: Ben Wong
Covestor model: Tactical and Opportunistic
Looking back at 2011, it was hard and volatile year to be investing in the market. As I started building our portfolio, I leaned towards stocks with high dividend yields.
One of our main positions is a telecom company Frontier Communications (FTR), which is 22% of our portfolio. As we continue onto 2012, I expect Frontier to finish integrating Verizon landlines they acquired back in 2010. I believe this should result in a significant rise in earnings for 2012.
We currently are overweight in REITs (38% of our portfolio) that provide high dividend return. We own Invesco (IVR) and American Capital Agency (AGNC). They both dropped in September after the SEC asked for feedback on changing the rules regarding REITs tax exemptions and the amount of leverage these firms can use. In 2012 we will continue holding these positions and collect the dividend.
The next major position is in Microsoft (MSFT) – a 25.76% position in our portfolio. Among the many products and services they sell, I am particularly excited about two. The first is their push into mobile phones with the Windows Phone operating system and their partnership with Nokia to sell it. The second is the Windows 8 platform they are currently developing. (source)
It looks like the start of 2012 is going to be as volatile as 2011, with unresolved European issues, expanding U.S debt and presidential elections. So for now I will keep our positions the same, with some cash and margin on hand for opportunities in the future.
