“I don’t have time to invest in individual stocks.”
This is a common saying I hear. A part of it is certainly true- most people simply don’t have time to spend many hours per week researching companies and tuning their portfolios.
But there’s a middle ground. Investors can, in addition to their passive funds, own a concentrated, diversified portfolio of individual stocks that:
1) They understand
2) Are low maintenance
3) Constitute good long-term holdings
And here are three examples of this sort of portfolio. I don’t necessarily recommend every company, and specific selections would be based on what companies an individual is bullish on, but they get the point across.
Portfolio 1
Company | Ticker | Dividend Yield |
---|---|---|
The Coca Cola Company | KO | 2.85% |
Canadian National Railway | CNI | 1.73% |
Berkshire Hathaway | BRK.B | 0.00% |
Abbot Laboratories | ABT | 3.67% |
Exxon Mobil | XOM | 2.36% |
Compass Minerals | CMP | 2.45% |
Average Portfolio Yield: 2.18%
Portfolio 2
Company | Ticker | Dividend Yield |
---|---|---|
Colgate Palmolive | CL | 2.70% |
McDonald’s Corporation | MCD | 2.89% |
Automatic Data Processing | ADP | 2.76% |
Cincinnati Financial | CB | 5.62%% |
Chevron Corporation | CVX | 3.11% |
Novartis | NVS | 3.94% |
Average Portfolio Yield: 3.50%
Portfolio 3
Company | Ticker | Dividend Yield |
---|---|---|
Intel Corporation | INTC | 3.91% |
Phillip Morris International | PM | 3.89% |
Realty Income Corp | O | 5.21% |
Exelon Corporation | EXC | 4.93% |
Johnson and Johnson | JNJ | 3.46% |
Kinder Morgan Energy Partners | KMP | 6.38% |
Average Portfolio Yield: 4.63%
Benefits of Ownership
The benefits of owning individual stocks are many.
-You keep yourself aware of business events and the economy.
-You ensure that you become and remain financially literate.
-You have a solid part of your portfolio in companies that you understand.
-You derive passive income from investments across many sectors.
-You get to vote in matters of those businesses.
Disclosure: I am long KO, ABT, XOM, CVX, and JNJ.