Jump to Navigation
Home

Main menu

  • Home
  • News
  • Markets Map
  • Sentiments
  • Topics
  • Data
  • Comments
  • Images
  • Blog
  • About

Secondary menu

  • Latest News
  • Top Rated
  • Most Popular
  • Archive
  • Discussions
  • 3 Teeth-Whitening Products That Actually Work
  • Protesters around the world march against Monsanto
  • Effective aid in conflict zones
  • "Those Who Believe In Abenomics Are Suffering From...
  • Re turns shaky on global turmoil, renewed dollar strength
  • Tony Blair is asked to help secure release of mining...
  • UK's problem isn't the financial sector – it...
  • Was jittery Thursday a foretaste of another global...
  • Bits Of Secrets
  • Is IPL rotten? Let’s hear it from fans

    2011: 6.8% Yield Fixed Income Portfolio vs. 6.8% Return on Equity

    Thu, 12/30/2010 - 08:51 EDT - Seeking Alpha
    • AA
    • AXP
    • BA
    • BAC
    • CAT
    • CSCO
    • CVX
    • DD
    • DIA
    • DIS
    • EMB
    • GE
    • Hao Jin
    • HD
    • HPQ
    • HYG
    • IBM
    • INTC
    • JNJ
    • JPM
    • KFT
    • KO
    • LQD
    • MCD
    • MMM
    • MRK
    • MSFT
    • PFE
    • PFF
    • PG
    • T
    • TRV
    • UTX
    • VZ
    • WMT
    • XOM

    Hao Jin submits:Depending on your age and your lifestyle, you need to save a lot of money to be able to retire early. One of the most important factors that make a difference in how much money you need to save for early retirement is the rate of return that you will earn from your portfolio. The emergence of ETFs in the past few years has allowed investors to make broad bets on entire baskets of stocks and bonds. Following are 2 sample portfolios with the same 6.8% potential annual return: one is a fixed income portfolio constructed using 4 populate ETFs; the other is Dow Jones 30 companies (DIA). A 6.8% Yield Fixed Income PortfolioIf you put money equally into following 4 sample ETFs, the 12-month yield for this portfolio would be 6.8%:Fund Name (Ticker)CategoryYieldiShares iBoxx $ High Yield Corporate Bd (HYG)High Yield Bond9.05%iShares S&P U.S. Preferred Stock Index (PFF)Preferred7.36%iShares JPMorgan USD Emerg Mkt B (EMB)Emer Mkt Bond5.60%iShares iBoxx $ Invest Grade Corp Bond (LQD)Long-Term Bond5.32%Totaln/a6.83% Dow 12,300, a 6.8% Return? Below are Dow Jones Industrial Average companies’ one year forward earnings:Name (Symbol)Forward P/EForward Earning3M (MMM)146Alcoa Inc. (AA)141American Express (AXP)114AT&T Inc. (T)123Bank of America (BAC)91Boeing (BA)145Caterpillar, Inc. (CAT)166Chevron Corporation (CVX)910Cisco Systems, Inc. (CSCO)112Coca-Cola (KO)174E.I. du Pont de Nemours (DD)144Exxon Mobil Corporation (XOM)116General Electric (GE)141Hewlett-Packard (HPQ)76Home Depot (HD)162Intel Corporation (INTC)112IBM (IBM)1213Johnson & Johnson (JNJ)125JP Morgan Chase & Co. (JPM)95Kraft Foods Inc. (KFT)142McDonald's Corporation (MCD)155Merck & , Inc. (MRK)104Microsoft Corporation (MSFT)103Pfizer, Inc. (PFE)82Procter & Gamble (PG)154The Travelers Companies (TRV)96United Technologies (UTX)155Verizon Communications (VZ)162Wal-Mart Stores, Inc. (WMT)124Walt Disney (DIS)133Total 13126 If we use P/E of 13, then the Dow will be 12,380 (126 * 13 / 0.1323). For more info regarding how to calculate Dow value, please refer to http://seekingalpha.com/article/196982-how-high-could-the-djia-go. Based on today’s Dow value, it would be a 6.8% return in 2011. ConclusionThere are lots of reasons to worry about the market. The story of 2011 might be that hundreds of towns, cities, and states face massive budget shortfalls that have to be addressed and problems are billions worse than advertised. Slowly ‘Dumb Money' returns to stocks. For now, this support could help the market extend its recent run. Yet it may also mean it is late in the rally game. Nevertheless, it is still worth jumping into the market, given the potential 6.8% return in 2011. Additionally, equity has the potential for both capital appreciation as well as income from dividends. Note: Data is from Yahoo Finance and iShares.com is valid as of December 29, 2010.Disclosure: I am long DIA, PFF.Complete Story »

    • Original article
    • Login or register to post comments
     

    Related

    • Building A Permanent ETF Portfolio, Part II

      By Scott's Investments: << Return to Part I

    • What's the Impact of Junk Bonds on Your Portfolio?

      Jim Pyke submits:There are many articles that write about the benefit of high yield corporate bonds, formerly known by the term junk bonds. In addition to providing good yields, they provide additional diversification benefits. The easiest way for a casual investor to gain exposure is through mutual funds or ETFs. I'll focus on the latter.

    • Leaders And Laggards Of The Dow Jones Industrial Average

      - By Pat Stout:The Dow Jones Industrial Average (DIA) recently reached an all-time high value. This article will detail if the individual issues reached new high levels, or if not what gain would be required to set a new high. Issues at an All-Time High March 22, 2013

    • Team Alpha Retirement Portfolio: Time To Focus On Ford

      By Regarded Solutions:In reviewing the core holdings of the Team Alpha Retirement Portfolio, I try to find stocks that have a balance of the ingredients I look for in a sound income producing portfolio: Quality products and brand, mega-cap blue chips, dividend paying winners or opportunities, and a dash of capital appreciation potential.

    • Retirement Strategy: A Portfolio Update On Time And On Fire (Part 28)

      By Regarded Solutions:I love months like the one we just had, don't you? Actually I love day's like Friday even more. The "Team Alpha" portfolio surged 6% in the month of June and while we remained in our holding pattern, we are still in great shape to add another stock to our core portfolio, and we can take some risk for the next few months as well.

    • Retirement Strategy: A Portfolio Update A Bit Late But Still Doing Great (Part 26)

      By Regarded Solutions:With so much news that has come out our "Team Alpha" portfolio update is a bit late this month but still is showing good results vs the recent declines in the overall markets.

    • SPDR DJIA ETF Offers Better Risk/Return Profile Than A 'Safe' 6% Yield Fixed Income Portfolio

      By Hao Jin:2012 is going to be another choppy year. On one hand, investors are encouraged by the best holiday shopping season since the Great Recession, a potential turnaround in the housing market, increased gains in job markets, improved consumer confidence and rising corporate profits. On the other hand, investors are concerned about European problems, a potential collapse of the banking system, slowing growth in emerging markets, a potential war in Iran and natural disasters.

    • Seeking Alpha From This High-Yield ETF

      By The Financial Lexicon:Over the years, I have spoken to many investors who are comfortable selecting individual stocks for their portfolios but fear diversifying their fixed income allocation across individual bonds. For these investors, when it comes to bond investing, diversified funds have been the way to go. And they don't favor just any diversified funds, but they often invest in passive funds with hundreds of holdings tracking a particular index.

    • Retirement Strategy: Portfolio Update - Time To Take Profits In An Overbought Market (Part 29)

      By Regarded Solutions:Our "Team Alpha" portfolio has had an awesome run thus far. Any of our readers who have followed this step by step portfolio, and strategy, would be well ahead of any of the market indexes and in very good shape for the balance of the year.That being said, I feel that Friday was a great day to take profits, rebalance and set some strategic goals for what I consider a market that has gotten ahead of itself.

    • Four Reasons to Include Preferred ETFs in a Portfolio

      Hao Jin submits:With the U.S. unemployment rate still over 9%, the Federal Reserve will most likely keep interest rates at low levels for quite some time. Thanks to booming ETFs, new asset classes such as preferred are available for retail investors. Here are four reasons why preferred ETFs should be included in your portfolio:1. High Stable Dividends

    Latest

    3 Teeth-Whitening Products That Actually Work
    3 Teeth-Whitening Products That Actually Work
    French soldier stabbed in Paris, police probing if connected to deadly London attack
    French soldier stabbed in Paris, police probing...

    User login

    • Create new account
    • Request new password
    • Click on the icon to sign in with your social network login or enter your Bullfax.com login

    Our Blog

    • Tata Steel, ECB, China’s car market and European Corporate Tax in Our News for Today 05/24/2013
    • Pandora: the charm might fade away
    • Japanese Market, Indian Rupee, China’s Stocks and Oil Prices in Our Daily Round-Up for 05/23/2013

    Markets Map

    Markets Map

    Follow Us

    Follow Us on Facebook, Twitter, Google Plus and RSS LinkedIn Facebook Twitter Google Plus RSS
    S&P 500: 1649.60 -0.06% FTSE: 6654.34 -0.64% Nikk.: 14612.45 0.88% DAX: 8305.32 -0.56% HSI: 22618.67 -0.23% FX: EUR/GBP: 1.1694 USD/EUR: 1.2935 JPY/USD: 101.175 Commodities: Gold: 1386.60

    Bullfax.com - Market News & Analysis 2008-2011
    Contact Us | About Us | Terms & Conditions

    Follow Us on Facebook, Twitter, Google Plus and RSS LinkedIn Facebook Twitter Google Plus RSS .

    Secondary menu

    • Latest News
    • Top Rated
    • Most Popular
    • Archive
    • Discussions