+36.76% Annual Return for High-Yield Stock Portfolio, Beating S&P 500 (Div.-Growth +19.9%)-Week 134 

Thanks, Anthony!

Hi Alex, no, not yet. But it might be a good idea for a future video. Is there anything in particular you are wondering about?

Yes, buy and sell signals are sent via email and are also on the website.

Hi Joe, we do both dividend-growth and high-yield strategies. The first portfolio we started (in 2022) emphasizes dividend-growth stocks, but a few high-yielders occasionally make it into the portfolio. The portfolio we started on Aug 1 of 2023 is the high-yield strategy.

@@RexJacobsen Ah! What do you consider high yield? I'm over here investing into BTI and MPW.

@@xJoeKing I consider high-yield to be 4% or higher. My current favorite with a very high yield is EPD. We are also looking for dividend growth as well as capital appreciation, so that eliminates the super-yielders like QYLD

Hi Missouri, I do compare how our strategy does versus an ETF at the 12:19 mark. The ETF is ticker SCHD. Or are you talking about wanting a portfolio of ETFs? If so, any ETFs in particular, or are you (or others reading this) looking for us to come up with a portfolio of ETFs on our own?

Hi Anthony, here is my long-winded answer ... When trying to determine if a stock is over or under-valued, we want to make sure that our methodology is looking at the company’s future and not ONLY the recent past. This is so we can avoid buying a company whose business is about to tank. For example, if a drug company’s main source of profits is a single drug and that drug is going to go off patent, simply looking at the company’s Price-to-Earnings ratio won’t give you a warning sign. So we don’t use a simple formula that looks at past data to determine if a stock is undervalued; we need to look into the future which involves making estimates. And that’s where utilizing the time and effort of “trusted” analysts comes into play. Their full time job is to look at each individual company’s future outlook, something we obviously can’t do since we start with a database of 6,700 companies. And I say “trusted” analysts because many analysts are NOT independent and are simply courting companies with “buy” ratings on their stock in order to earn that company’s investment banking business (one such analyst company notoriously has a “sell” rating on only 0.4% of the stocks that they cover; when everything is a “buy,” then that company’s ratings are worthless). We are always tweaking our methodology, but for valuation, we currently use the target prices of independent analysts (preferably multiple analysts employing multiple philosophies, such value and growth-at-a-reasonable-price) and combine that with the company’s risk profile to determine the company’s margin of safety (ala Warren Buffett and Benjamin Graham). Margin of safety is important because we’d rather invest in a low-risk stock that is 10% undervalued rather than a high-risk stock that is 13% undervalued. And of course, from there we do a deep dive into the company’s accounting practices to look for red flags/accounting irregularities to hopefully avoid frauds like Enron. And we look at dividend sustainability, growth potential, buy-backs, etc.

@@RexJacobsen excellent reply, Prof. Jacobsen - very helpful!

@@RexJacobsen thank you so much for the reply. Really helpful!

I don't believe so. I think it's a pretty decent turnaround play and you get paid a 5.46% dividend yield while you wait. It's part of our High-Yield Dividend Stock Portfolio. We've made several purchases of it so far for an average total return of 12.02% with an average holding period of 158 days (that's a 30.0% annualized return using Excel's RATE function). Per Morningstar, "After years of restructuring via the spinoff of its consumer unit and the spinoff and merger of its legacy drug portfolio with Mylan, plus recent internal shifts to align the business with the post-covid world, Pfizer is set to be more nimble and innovative. Now past the boom and bust of the covid-19 vaccine sales cycle, and with no material near term patent expirations, the company is poised to generate steadier results."

@@RexJacobsen great reply thank you!

It's a cumulative portfolio. Meaning we deposit new funds each week, so of course the equity curve will go up and to the right even in a bad year like 2022. Even if the return was zero each and every week, the portfolio graph would rise because there are weekly deposits. You can see this for yourself using Excel. For 2022, use Excel and make a chart using an index ETF like SPY and track what a weekly $12.50 investment would look like on a chart. It's an actual Fidelity portfolio, not a backtest.

Dude, you must have missed the fact that they deposit $12.50 each and every week. Either that or you don't understand basic arithmetic. Of course the chart goes up and to the right.