The following chart, taken from the paper, relates actual (realized) past returns to the returns estimated by survey participants based on responses to: «Please try to estimate the past
performance of your stock portfolio at your online broker.
Over the past five years, Google has dramatically outperformed the S&P 500 Index, which is the benchmark for
the performance of a stock portfolio.
Not exact matches
Admittedly, after years
of acquisitions, Berkshire's bottom line has more to do with the
performance of the increasingly large companies it owns — including, for instance, railroad giant BNSF and Heinz — and less to do with the returns
of its
stock market
portfolio.
He wrote that both Combs and Weschler, who Buffett has indicated are likely to take over managing the bulk
of Berkshire's massive
stock market
portfolio when he leaves the company, had «handily» beaten the market, as well as Buffett's own
performance, for the second year in a row.
«Foreign
stocks have detracted from our
performance, but we still like them in a
portfolio,» said Barry Glassman, CFP and founder and president
of Glassman Wealth Services.
Methods: The
stock market
performance of portfolios of CHAA winners was examined under six different scenarios using simulation and past market
performance in tests
of association framed to inform the investor community.
Adding some
of these
stocks to your
portfolio considerably slows down your overall
performance.
While past
performance is no guarantee
of future results, historical returns consistently show that a well - diversified
stock portfolio can be the most rewarding over the long term.
As you can see in the chart below, based on investment
performance for the 35 - year period beginning in 1972, a hypothetical balanced
portfolio of 50 %
stocks, 40 % bonds, and 10 % short - term investments would have done quite well for a retiree who limited withdrawals to 4 % annually.
Consider the
performance of 3 hypothetical
portfolios in the wake
of the 2008 — 2009 financial crisis: a diversified
portfolio of 70 %
stocks, 25 % bonds, and 5 % short - term investments; a 100 %
stock portfolio; and an all - cash
portfolio.
Consider the
performance of 3 hypothetical
portfolios: a diversified
portfolio of 70 %
stocks, 25 % bonds, and 5 % short - term investments; an all -
stock portfolio; and an all - cash
portfolio.
The pointlessness
of positioning a
portfolio for a particular news event couldn't be clearer than it is in the strong
stock market
performance following the June 23 referendum vote in Britain to leave the European Union.
«The Impact
of Financial Advisors on Individual Investor
Portfolio Performance», based on a subset
of these observations encompassing more than 193,418 monthly common
stock return observations for 5,661 investors, finds that:
The addition
of the one hundredth
stock simply can't reduce the potential variance in
portfolio performance sufficiently to compensate for the negative effect its inclusion has on overall
portfolio expectations».
Each year I put the new chart in a plastic sleeve and when clients came into my office for a
portfolio review, I would carefully point out the dramatic differences in
performance between this consumer staples
stock versus many
of the cyclicals on the list, particularly Big Blue.
This can offer investors multiple layers
of diversification, including geographical, currency, and sector, thus reducing the chances that the
performance of a single
stock or instability in a single country can negatively impact the
performance of the entire
portfolio.
If good
performance of the fund is even a minor objective, any
portfolio encompassing one hundred
stocks is not being operated logically.
Stock market
performance this year serves as a reminder
of why it makes sense to consider including international
stocks in your
portfolio.
Bonds help lower the volatility
of a
portfolio while
stocks provide the upside
performance.
The strong recent
performance of U.S.
stocks may mean you need to rebalance your
portfolio.
Conversely, active investing (also referred to as «
stock picking») involves the individual selection
of securities by an investor or
portfolio manager.The shift away from active and into passive has been dramatic, driven by both the lower cost and historically better
performance of passive funds.
Momentum and growth
stocks were in favor this year, and that helped the Validea Momentum and Small - Cap growth investor
portfolios lead the pack in terms
of relative
performance.
I doubt that anyone has ever told you this before, but the «average» return for a category
of funds — whether a large subset like diversified
stock funds or a narrower one like small - company growth — tracks only the
performance of the
portfolios that survived all the way from the beginning
of the measurement period to the end.
- retirement savings and income - Pre-59 1/2 72t Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model
portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio illustrations - asset allocation and
portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio optimization -
portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio management and value tracking - 401 (k) retirement savings - Cost
of waiting to save - Effect
of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical
Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Performance - Impact
of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types
of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation
of Employer
Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates -
Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Allocation Rebalancing -
Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Optimization and «Advice» -
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth 401k - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculations
- retirement savings and income - Pre-59 1/2 72t Calculations (avoiding penalty tax)- college savings and 529 plan illustrations - college cost and tuition data - Coverdell education savings - risk profile questionnaires and quizes - model
portfolio illustrations - asset allocation and portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio illustrations - asset allocation and
portfolio optimization - portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio optimization -
portfolio management and value tracking - 401 (k) retirement savings - Cost of waiting to save - Effect of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
portfolio management and value tracking - 401 (k) retirement savings - Cost
of waiting to save - Effect
of Taxes and Inflation - Estate Tax Estimator - Finding Money for your savings goals - Health Savings Account (HSA) illustrations - Historical Hypothetical
Portfolio Performance - Impact of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Performance - Impact
of Inflation - Life Insurance Needs Analysis - IRA Eligibility (all types
of IRAs)- IRA Savings and Goal Analysis - IRA Required Minimum Distributions (RMDs)- IRA to Roth Conversion - Long Term Care Insurance - Lumpsum Distributions vs. Rollover Distributions - Model
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation of Employer Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates - Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Creation and Comparisons - Mortgage Amortization - Net Unrealized Appreciation
of Employer
Stock - Net Worth Estimator - New Value Calculator - Pension / Defined Benefit Income estimates -
Portfolio Allocation Rebalancing - Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Allocation Rebalancing -
Portfolio Optimization and «Advice» - Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Optimization and «Advice» -
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield cal
Portfolio Return Calculations - Paycheck Tax Savings - Required Minimum Distribution calculations - Retirement Budget and Expense Planning - Retirement Income Analyzer - Retirement Savings Estimator - Risk Tolerance Profile - Roth Conversion - Roth v. IRA illustrations - Short Term Savings goals - Social Security benefit estimates - Stretch IRA / Legacy IRA illustrations - Tax Free Yield calculations
According to the Law
of Conservation
of Alpha, the
portfolio's
performance will match the average
performance of active managers that play in that same universe, i.e., active managers that own
stocks in the S&P 500.
Compared to a +53 %
performance of the
portfolio in the same period, the
stock is clearly a underperformer and the question is clearly if I should keep the
stock.
In their May 2015 paper entitled «Lumber: Worth Its Weight in Gold: Offense and Defense in Active
Portfolio Management», Charles Bilello and Michael Gayed examine the recent relative
performance of lumber (a proxy for economic activity via construction) and gold (a safe haven) as an indicator
of future
stock market and bond market
performance.
So even if a mutual fund owned these
stocks, as Oakmark did, they likely added more to the
performance of the S&P 500 than to the mutual fund's
portfolio.
In their August 2014 paper entitled «Testing Rebalancing Strategies for
Stock - Bond
Portfolios Across Different Asset Allocations», Hubert Dichtl, Wolfgang Drobetz and Martin Wambach investigate the net performance implications of different rebalancing approaches and different rebalancing frequencies on portfolios of stocks and government bonds with different weights and in differen
Portfolios Across Different Asset Allocations», Hubert Dichtl, Wolfgang Drobetz and Martin Wambach investigate the net
performance implications
of different rebalancing approaches and different rebalancing frequencies on
portfolios of stocks and government bonds with different weights and in differen
portfolios of stocks and government bonds with different weights and in different markets.
Does adjusting
stocks - bonds allocations according to trend following rules improve the
performance of 30 - year retirement
portfolios?
While the relatively strong
performance of our
stock selection approach has been an important factor in the Fund's returns since inception, even a single holding in a
portfolio of over 200 can exert an effect on a day - to - day basis.
«We are willing to endure a high degree
of stock price and
portfolio volatility because we believe it allows us to achieve a greater degree
of investment
performance over the long term» Bill Ackman
In their November 2016 paper entitled «Applying a Systematic Investment Process to Distributive
Portfolios: A 150 Year Study Demonstrating Enhanced Outcomes Through Trend Following», Jon Robinson, Brandon Langley, David Childs, Joe Crawford and Ira Ross compare retirement
portfolio performances for variations
of the following three strategies that may hold a broad
stock market index, a 10 - year government bond index or cash (3 - month government bills) in the U.S., UK or Japan:
Arguably a pretty conservative investment approach, the historical
performance of the Coffeehouse
portfolio has been strong over time — generating 5 % + over the past 10 years, but it still falls short when compared to investing in a total
stock market index fund or S&P 500 fund that track those market indexes.
Roush Enterprises — a longtime SEMA - member company — is building Google's driverless cars in Livonia, Michigan, adding to the company's
portfolio of performance parts, military vehicles and NASCAR
stock cars.
Second, I launched the «SR» versions
of our strategies back in 2014, backed by research demonstrating that applying social responsibility screens to a
stock portfolio not only doesn't hurt
performance, it can actually enhance
performance.
Stock market
performance this year serves as a reminder
of why it makes sense to consider including international
stocks in your
portfolio.
Using historical
performance of stock indices as a basis, a
portfolio comprised solely
of ETFs may limit the
portfolio's exposure to the price fluctuations affecting individual
stocks.
The irrational part is thinking that dividends are the only good way to generate income from
stocks, are the primary source
of superior
performance in any given period, or that dividends somehow magically convey stability to your
portfolio that's not available from other types
of stock allocations.
In professors Gerald Martin and John Puthenpurackal's study
of Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B)'s
stock portfolio's
performance from 1980 to 2003, they discovered that the
portfolio's 261 investments had an average annualized rate
of return
of 39.3 %.
Based on market
performance the bond fund is still at 40 %
of the
portfolio, but the international fund has dropped to 15 %, while the U.S.
stock fund grew to 45 %
of the
portfolio.
The Model Shadow
Stock Portfolio has recovered from the poor first - quarter
performance and has a year - to - date return
of 4.0 %.
Because I tend to make shifts to the
portfolio quarterly in groups
of four or so
stocks, I can see themes working out as I look at
performance in the order that
stocks were purchased.
I'm introducing a new
portfolio to track the
performance of Graham NCAV
stocks in real time.
Furthermore, MPT assumes that it is possible to select
stocks whose individual
performance is independent
of other investments in the
portfolio.
And, just like with Stash's Themes and Mixes, by clicking into an individual
stock you can learn more about the companies overview, how aggressive
of an investment it is, what its
performance has been, and who (in the Stash community) currently owns it in their
portfolio.
Though the periodic payments do add to overall
portfolio performance, dividend - yielding
stocks are not immune from the volatility
of the overall market.
Therefore, the overall impact on my
portfolio due to the poor
performance of just one
stock was quite small.
For example, given the past year
of poor
stock performance and good bond
performance, it's a poor time to change the
stock / bond allocation in my
portfolio from 80 % / 15 % to 75 % / 20 % because that would mean «selling
stocks low» and «buying bonds high.»