It is my firm belief, along with historical figures from numerous studies, that 80% of money managers can't outperform the S&P 500 index over time due primarily to the fees they charge their clients. Each and every individual person intent on having the happiest retirement possible should take charge of their retirement portfolios and invest in simple index/mutual funds and/or a balanced portfolio like the one I have set up to start 2021. My ratios and distributions are based on my book, which can be found on Amazon, which was written with beginning investors and young people like high schoolers and college students in mind to outperform professionals over time.
My portfolio is currently divided up to start 2021 at around 72% stocks and around 28% mutual and index funds with the goal to increase stocks to over 80% of my portfolio over time. It is currently built with approximately 85% domestic stocks and 15% foreign stocks. This is down from my usual percentages mainly because I sold some of my Chinese exposure due to the development of COVID-19 over 2020. I have about 3% of my portfolio in bond mutual funds so that I know how they work and to have at least a little exposure to this sector over time. I plan to have bonds be a very small portion of my portfolio up to right around age 65. Diversification lifts my whole portfolio's returns over time, so finding the best stocks in every sector is a goal for me each and every year.
Here are the details of my personal ~$300k portfolio then, based on values of approximately $30k, $300k, and $3 million broken down by sectors with brief descriptions of each stock in each sector. The best thing about my portfolio setup is that it is scalable so that people interested in following a similar path can set up their portfolios to follow my path no matter how small or large their holdings are. With fee-free trading and the advent of fractional shares, investors are more capable than ever in setting up amazing portfolios even when starting from scratch.
The Welsh Portfolio 2021 The Welsh Portfolio
The Information Technology Sector (15% of my Stock holdings)
Stock $30K $300K $3M $AAPL $970 $9,700 $97,000 $QCOM $880 $8,800 $88,000 $XLNX $670 $6,700 $67,000 $DELL $440 $4,000 $40,000 $MSFT $190 $1,900 $19,000 $STNE $150 $1,500 $15,000 $RBLX $120 $1,200 $12,000 $VMW $100 $1,000 $10,000 $WORK $85 $850 $8,500 $V $80 $800 $8,000
1. Apple (AAPL) should be considered as a potential cornerstone piece to any portfolio as one of the world's largest and most profitable companies that prints money almost faster than the Fed. My 5th largest holding, which I am always willing to add more shares of.
2. QUALCOMM (QCOM) is a major technology solutions provider for companies like Apple and will be an integral part of upcoming transformational secular revolutions like 5G.
3. Xilinx (XLNX) is being acquired by Advanced Micro Devices (AMD) in a $35B all-stock transaction hopefully before the end of 2021. I love the built-in arbitrage of all-stock transactions like this for tremendous companies like AMD and didn't mind selling my AMD in 2020 to buy Xilinx.
4. Dell (DELL) is a legacy holding which continues to aggressively grow through value acquisitions like the $67B EMC deal and the future potential full acquisition of the hybrid cloud giant VMware (VMW) which it owns ~80% of.
5. Microsoft (MSFT) is a dominating force of nature that only government intervention seems able to slow down. It has done a phenomenal job of transitioning itself into a dominating cloud player.
6. StoneCo (STNE) is a Brazilian Fintech company that Buffett has been an early investor in. I trimmed my position after a marvelous 2020 run and hope to maybe add again on dips.
7. Roblox (RBLX) is a teen gaming platform that I hope IPO's by the end of 2020. My hope is that it does not come out of the gate as hot as earlier IPO's DoorDash (DASH) and Airbnb (ABNB), which were too expensive for investing in for me personally. I always try to have an eye on what younger generations are loving. This spot is reserved in my portfolio and is currently represented by cash waiting to be put to work.
8. VMware is a hybrid cloud growth giant I presume Dell will either acquire or fully spin off in the coming years. Either result should be good for shareholders over time as it continues its exceptional growth and cash flow generation.
9. Slack (WORK) is being acquired by Salesforce (CRM) in a $27.7B cash and stock deal in 2021. I view this as a starter position for an eventual bigger Salesforce position. Again, another arbitrage opportunity.
10. Visa (V) is a small position in a dominant credit card company with few players and high barriers to entry. It is an entrenched player with an enviable market position.
The Health Care Sector (15% of my Stock holdings)
$4,000 $MDXG
Stock $30K $300K $3M $ARWR $1,680 $16,800 $168,000 $MDT $430 $4,300 $43,000 $SRPT $400 $40,000 $400 $4,000 $40,000 $LLY $400 $4,000 $40,000
11. Arrowhead Pharmaceuticals (ARWR) is my largest individual stock position as an RNAi juggernaut entering key Phase 3 trials in 2021. A lovely balance sheet with key partnerships with Janssen (JNJ) and Amgen (AMGN) significantly de-risk its TRiM platform as it continues to expand into additional cell types.
12. Medtronic (MDT) Health Care device maker that I think has significant upside from COVID-19 issues for years to come.
13. Sarepta (SRPT) is the leader in duch*enne Muscular Dystrophy advancements with solid cash flows and the inside track on potential game-changing gene therapy results coming in 2021. Formerly, one of my larger positions which got trimmed as investors wait for gene therapy results.
14. MiMedx (MDXG) was my largest individual stock position for a good portion of 2020 as the company made momentous strides in getting its financials back in order and re-listed on the NASDAQ. I trimmed this position after re-listing as its potentially game-changing knee osteoarthritis data comes out later in 2021. I hope to slowly add back to this position in 2021.
15. Eli Lilly (LLY) is a favored legacy holding that I hope to slowly add to over time and never sell.
The Communication Services Sector (15% of my Stock holdings)
Stock $30K $300K $3M $DIS $1,650 $16,500 $165,000 $T $1,050 $10,500 $105,000 $WWE $500 $5,000 $50,000
16. Disney (DIS) will crush Netflix (NFLX) over time as its streaming platform continues to grow by leaps and bounds. Forever stock for me as my second largest individual stock holding while always looking to add cheap shares.
17. AT&T (T) is my main dividend play as my third largest individual stock holding with current yields a little under 7%. Amazingly strong cash flows mean that management can continue to bumble along without much fear of bankruptcy. If management ever figures out how to add value, this stock is set to soar.
18. World Wrestling Entertainment (WWE) is one of the few remaining live event media stocks growing globally, while always a potential takeover target from juggernauts like Disney.
The Financial Sector (15% of my Stock holdings)
Stock $30K $300K $3M $GBTC $920 $9,200 $92,000 $JPM $710 $7,100 $71,000 $BLK $480 $4,800 $48,000 $BRK/B $450 $4,500 $45,000 $FNMAS $240 $2,400 $24,000 $HSBC $190 $1,900 $19,000
19. Bitcoin (GBTC) soared over the back part of 2020 becoming my sixth largest individual stock holding as institutions continue to take a greater interest in it. As world banks and the Fed continue to print money like it's going out of style due to COVID-19, alternate money sources like Bitcoin could easily continue to see outsized gains.
20. JPMorgan (JPM) is the best big bank out there. I rest my case your honor.
21. BlackRock (BLK) is a leader in index funds and always seems to be completing deals that continue to bring long-term investor results, in my opinion. They do a good job of growing their annual dividend as well.
22. Berkshire Hathaway (BRK.B) shares are non-voting shares in Warren Buffett's company. It has always been a dream of mine to own an A share with voting rights and to attend an annual shareholder's meeting in Omaha, AKA Woodstock for Capitalists.
23. Fannie Mae (OTCQB:FNMAS) preferred shares are a bet on the government eventually releasing the company back into the public sector after privatizing it during the financial crisis. Preferred shares have less risk than common shares if privatization continues and, thus, less upside, too, of course.
24. HSBC Bank (HSBC) is a legacy holding that might finally see some upside if the United Kingdom can ever get Brexit resolved.
The Consumer Discretionary Sector (6% of my Stock holdings)
Stock $30K $300K $3M $AMZN $620 $6,200 $62,000 $TSCO $400 $4,000 $40,000 $MELI $310 $3,100 $31,000 $TSLA $60 $600 $6,000
25. Amazon (AMZN) continues to dominate the world of online retail, cloud, and virtually anything else it expands into like no other company in history. Is on my current never-sell list with a small celebration every time I can add another share.
26. Tractor Supply Company (TSCO) quietly continues to perform as one of the best companies in retail mostly immune to Amazon's dominance. Its acquisition of Petsense makes a lot of sense now, especially with the growth of everything pet in the wake of COVID-19.
27. MercadoLibre (MELI) is Latin America's Amazon based in Brazil.
28. Tesla (TSLA) stock has been amazing giving me thousands to tens of thousands in profits over the past few years as I buy and sell trends. I am currently looking for a nice substantial dip to expand my position again.
The Consumer Staples Sector (6% of my Stock holdings)
Stock $30K $300K $3M $PG $500 $5,000 $50,000 $PEP $450 $4,500 $45,000 $GIS $380 $3,800 $38,000
29. Procter & Gamble (PG) is a legacy holding that sports a decent growing dividend along with many best in class brands like Olay, Head & Shoulders, Dawn, and Charmin. Always nice to have some stalwarts for the upcoming recessions and depressions.
30. PepsiCo (PEP) is a phenomenal drink company with brands like Pepsi-Cola, Gatorade, and Tropicana along with amazing growth in the snack category with Frito-Lay that, in my mind, sets it apart from competitors like co*ke (KO).
31. General Mills (GIS) is a legacy holding for me with a great dividend that experienced a huge turnaround during COVID-19 with its brands, including its $8B acquisition of Blue Buffalo in 2018. Its former debt concerns have mostly evaporated as it has shored up its balance sheet and continues to benefit from the stay-at-home movement.
The Industrials Sector (6% of my Stock holdings)
Stock $30K $300K $3M $J $730 $7,300 $73,000 $BA $210 $2,100 $21,000 $SPCE $190 $1,900 $19,000 $AAXN $180 $1,800 $18,000
32. Jacobs Engineering (J) is a legacy holding I have loved for years. A long-time no-debt company that makes super-smart acquisitions now has low debt and has initiated a dividend which it should be able to grow nicely over the coming years. Its focus on carbon neutrality and diversity in its workforce makes it a prime target for the younger generation.
33. Boeing (BA) is too big and important to fail, meaning that its deep discount was a great buying opportunity earlier in the year. I have since then trimmed my position back markedly with an eye to potentially add a few shares here and there on dips.
34. Virgin Galactic (SPCE) is the only way to play commercial space flight at this time making it a potentially very volatile stock. I hope to buy more on dips.
35. Axon (AAXN) is the maker of Taser as well as the bodysuits, cameras, and cloud software for officers across the United States.
The Materials Sector (6% of my Stock holdings)
Stock $30K $300K $3M $GOLD $1,050 $10,500 $105,000 $CLF $150 $1,500 $15,000 $JJN $100 $1,000 $10,000
36. Barrick Gold (GOLD) is a large and diversified gold miner that has exposure to multitudinous geographies across the globe. With the Fed and other monetary institutions printing money at record rates, Barrick has much further potential upside and is currently my fourth largest holding.
37. Cleveland-Cliffs (CLF) is an Iron Range stock that acquired AK Steel at the end of 2019 and, more recently, announced the acquisition of ArcelorMittal (MT) in late 2020 in a deal valued at $3.3B. Cleveland-Cliffs is well on its way to becoming a fully integrated steelmaker with clout in the U.S.
38. Nickel Subindex (JJN) is a play on the future of automated and battery-operated vehicles which look likely to consume inordinate amounts of nickel in the coming years.
The Energy Sector (6% of my Stock holdings)
Stock $30k $300k $3M $RDS/B $480 $4,800 $48,000 $PBR $470 $4,700 $47,000 $HAL $310 $3,100 $31,000
39. Royal Dutch Shell (RDS.B) is a leader in the oil industry with a dividend that management is looking to grow quickly after it slashed it earlier in 2020 due to COVID-19 concerns.
40. Petrobras (PBR) is a Brazil-based oil play with lots of potential if it can get past its scandal-ridden past.
41. Halliburton (HAL) is a U.S.-based oil service company that dominates the North American market.
The Utility Sector (5% of my Stock holdings)
Stock $30K $300K $3M $DUK $550 $5,500 $55,000 $D $480 $4,800 $48,000
42. Duke (DUK) is a top utility play with a tremendous dividend which are the main features I look for in the Utility sector.
43. Dominion (D) is the other top utility play that I like with a very attractive dividend as a utility major.
The Real Estate Sector (5% of my Stock holdings)
Stock $30K $300K $3M $AMT $660 $6,600 $66,000
44. American Tower (AMT) is a premier U.S. cell phone tower company aggressively expanding globally across a few more continents. 5G evolution should be a tailwind for years to come.
Bonds (2% of my Stock holdings)
This asset class is currently satisfied by my mutual fund holdings.
Staying diversified across all sectors of the economy while making larger bets on your favorite stocks is a great way not only to beat the market, but have fun doing it as well. Stocks are one of the best ways to build wealth for retirement, and everyone should have the opportunity to share in the success of the best companies the world has to offer. Best of luck on another productive and lucrative year in 2021.
This article was written by
Trent Welsh
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B.S. Psychology University of Missouri-Columbia MBA University of Missouri-Columbia Full time investor looking to capitalize on market overreactions and looking for value where others see nothing but wreckage. Long term buys and short term trades to build wealth.Investing Better Than A Money Manager: The Rise Of Retail Investing - By Trent WelshI have an investing book with the title above on Amazon written for beginning retail investors looking to set up a self-directed portfolio with their IRA's, 401k's, or other retirement or trading accounts. It details how to pick and choose stocks amidst the different sectors and how to figure out how much in each sector an investor should have to help achieve diversification.Please take a look at it and let me know your thoughts. Thanks and Best of luck to all :).
Analyst’s Disclosure: I am/we are long AAPL, GIS, PG, PEP, RDS.B, PBR, HAL, BRK.B, GBTC, HSBC, FNMAS, BLK, JPM, SRPT, MDXG, ARWR, MDT, LLY, BA, J, SPCE, AAXN, CLF, JJN, GOLD, DUK, D, QCOM, DELL, STNE, XLNX, V, MSFT, VMW, WORK, DIS, WWE, T, TSCO, AMZN, TSLA, MELI, AMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
