Author: Taj McCree
Covestor model: Value and Growth 2
Disclosure: Long GNI
With a new year brings renewed expectations; such is the case with the Value & Growth 2 Model. At the start of the year, I began the ardent task of evaluating all of the model’s holdings and realigning my strategy for 2012. Under the old strategy, I focused on stocks that I considered to be well under priced (think banking) which led to dramatic swings in the portfolio. In 2012 this model will focus on dividend- paying stocks with a good history of stable and timely payouts. Fortune 500 stocks, REIT’s and royalty trusts will get more attention.
To execute this strategy it was necessary to close out positions in companies that did not fare well over the last year. Highly volatile stocks like Bank of America (BAC) and Bank of Ireland (IRE) were liquidated in favor of stocks like Cross Timbers Royalty Trust (CRT). Retail stocks may be due a rebound as the economy strengthens so positions like Avon Products (AVP), despite its recent quarterly showing, look attractive over the long-term. Looking forward, I plan to keep the current strategy in place – which has already yielded positive gains – and focus my attention on positions that can build more wealth for the model.
