13 Great Stock Portfolio Examples & How To Implement Them

Years of Investing Research Enables Us To Detail 13 Top Stock Portfolio Examples From Buffett, Greenblatt, Bernstein & LST Beat The Market Portfolio.

If you are looking to be inspired by examples of the best stock portfolios and strategies, then look no further. We have compiled 13 excellent example portfolios that will enable you to choose the right strategy to kick start your investing journey.

Most of the research, screening, and implementation of the portfolios in this article have been performed with Stock Rover, our valued partner and our review winner for best stock market analysis software and best stock screener. Read the in-depth Stock Rover Review to find out more.

Great Stock Porfolio Examples

13 Great Stock Portfolio Examples

1. The Berkshire Hathaway Stock Portfolio

One way to think of Berkshire Hathaway (NYSE: BRK.B) is as a giant stock portfolio.

Thus, you can create your own Buffett stock portfolio by reading lists of stocks Berkshire Hathaway owns. The thinking behind this portfolio is that its performance could replicate Warren Buffett’s success.

Berkshire Hathaway’s ten largest stock holdings in 2020 were Bank of America (BAC), Coca-Cola (KO), Kraft Heinz (KHC), Apple (AAPL), Wells Fargo (WFC), American Express (AXP), US Bancorp (USB), Bank of New York Mellon (BK), and Sirius XM (SIRI). You could create a portfolio by placing 10% of your investment in each of those stocks.

An Inspiring Analysis of Warren Buffett's Stocks. Biggest Investments, Dividend Yields & Margin of Safety +Best Value Stocks In His Portfolio Now.

This strategy has risks because it is heavily focused on the traditional economy, heavy industry, energy, finance, real estate, tech, and the US economy. However, Buffett has done well by it; he had the world’s fourth-largest fortune of $82.3 billion in September 2020.

The Berkshire Hathaway Portfolio Example

TickerCompanyQuantityPriceValue
AAPLApple249,589,329 $  234.12 $    58,435,101,652.00
BACBank of America947,760,000 $    30.06 $    28,484,927,089.00
KOCoca-Cola400,000,000 $    53.85 $    21,538,000,488.00
WFCWells Fargo409,803,773 $    49.60 $    20,328,315,972.00
AXPAmerican Express151,610,700 $  118.15 $    17,912,804,436.00
KHCKraft Heinz325,634,818 $    27.57 $      8,976,123,932.00
USBU.S. Bancorp132,459,618 $    54.58 $      7,230,308,127.00
JPMJPMorgan Chase59,514,932 $  120.24 $      7,155,777,885.00
MCOMoody’s24,669,778 $  218.20 $      5,382,945,484.00
GSGoldman Sachs Group18,353,635 $  205.03 $      3,763,045,762.00
BKBank of New York Mellon80,937,250 $    44.51 $      3,602,112,398.00
LUVSouthwest Airlines53,649,213 $    53.83 $      2,888,205,333.00
GMGeneral Motors72,269,696 $    36.28 $      2,621,583,333.00
CHTRCharter Communications5,426,609 $  441.82 $      2,397,584,428.00
DVADaVita38,565,570 $    57.86 $      2,231,403,904.00
UALUnited Airlines Holdings21,938,642 $    89.48 $      1,963,069,760.00
VVisa10,562,460 $  177.73 $      1,877,265,971.00
MAMastercard4,934,756 $  277.12 $      1,367,519,559.00
LSXMKLiberty SiriusXM Gr31,090,985 $    43.88 $      1,364,272,455.00
COSTCostco Wholesale4,333,363 $  300.98 $      1,304,233,955.00
PNCPNC Financial Services Gr8,671,054 $  142.39 $      1,234,671,374.00
AALAmerican Airlines Group43,700,000 $    27.93 $      1,220,759,477.00
SIRISirius XM Holdings137,915,729 $       6.47 $          893,004,332.00
TRVTravelers Companies5,958,391 $  141.59 $          843,618,830.00

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2. The Beat the Market Portfolio Example

The Liberated Stock Trader Beat the Market Screener seeks to select stocks that have a significant chance of beating the S&P500 returns. The screener uses growth in free cash flow and explosive EPS growth.  Combining this with Joel Greenblatt’s ROC and Earnings Yield formulas “the Magic Formula,” we have a selection of stocks that beat the market 5 of the last seven years.

In this article, I will discuss the criteria and the methodology that goes into the screener and cover the current results and the results of 7 years of backtesting.

Beat the Market Stock Screener
The Liberated Stock Trader “Beat the Market” Portfolio Outperformed the S&P500 by 50% over the last 7 Years to 2020

This work has been made possible due to the fabulous work done by the team over at our partner Stock Rover, who has created a stock research and screening platform that won our in-depth Best Stock Screener Review for the last two years.

Why is Stock Rover so special when it comes to creating superior stock screeners?  Because Stock Rover maintains a clean 10-year historical database of hundreds of vital ratios, calculations, and metrics.  This means you can travel back in time to test if your stock selection criteria have worked in the past.

This Liberated Stock Trader Beat the Market Screener (LST BTM) is built into the Stock Rover library and is available to all Stock Rover Premium Plus Subscribers.

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The Liberated Stock Trader Beat the Market Portfolio Performance.

7 Year PerformanceS&P500 Index January 1 to December 31Beat the Market ScreenerResult
201329.8%49.4%Beat
201411.4%16.9%Beat
2015-0.7%2.6%Beat
20169.5%23.2%Beat
201719.4%37.4%Beat
2018-6.2%-24.9%Lost
201928.9%46.8%Beat
Average Yearly Return13%22%Beat

 

Results Based on $100,000 Invested.

S&P500 index ReturnsBeat the Market Screener
Initial Investment $           100,000.00 $       100,000.00
2013 $           129,800.00 $       149,400.00
2014 $           144,597.20 $       174,648.60
2015 $           134,475.40 $       179,189.46
2016 $           147,250.56 $       220,761.42
2017 $           175,817.17 $       303,326.19
2018 $           164,916.50 $       227,797.97
2019 $           212,577.37 $       334,407.42
+57% or +$121,830

Beat The Market Example Portfolio Stocks

TickerCompanyIndustryPriceGrowth Score1Y Return vs. S&P 500
AMDAdvanced Micro DevicesSemiconductors$77.8776150.90%
DXCMDexComDiagnostics & Research$393.1761149.30%
ECLEcolabSpecialty Chemicals$199.4880-12.70%
FICOFair IsaacSoftware – Application$428.589621.00%
MAMastercardCredit Services$337.51979.60%
MSFTMicrosoftSoftware – Infrastructure$209.339937.70%
NFLXNetflixEntertainment$487.2010070.80%
NVONovo NordiskBiotechnology$68.789120.60%
PAYCPaycom SoftwareSoftware – Application$289.7110022.10%
PCTYPaylocity HoldingSoftware – Application$157.358346.00%
PYPLPayPal HoldingsCredit Services$189.489967.00%
SEDGSolarEdge TechnologiesSolar$208.37100131.50%
CashCash$1.00-14.20%
Summary9075.00%

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3. The ESG Ethical Investing Portfolio Example

If you care about the environment and the state of the planet, you are probably already taking steps to try and reduce your impact on the world.  Perhaps like me, you have an electric or hybrid car, and you are reducing your use of plastics, you recycle, and are eating more vegetarian or even vegan dishes.

But there is more you can do to help promote and encourage more companies to adopt better Environmental, Social, and Governance (ESG) best practices. You can put your money to work in companies that have robust ESG policies.

ESG Investing Principles

ESG investing (Environmental, Social & Governance) enables ethical investors to channel their capital to companies that demonstrate environmental sustainability, social responsibility, and good corporate governance. ESG investing can be done by investing in specific companies or by investing in some of the new ESG Exchange-Traded Funds.

EnvironmentSocialGovernance
Air QualityLabor PolicyExecutive Pay
Green EnergyCommunity ImpactEthical Practices
Waste MgtEqual EmploymentTransparency
Hazardous MaterialsEqual OpportunityAccounting & Taxes

ESG Portfolio Performance

Interestingly, investing in companies doing the right thing ethically is not bad for your investing returns. In the chart above, you can see that the portfolio performance for the Top 20 ESG Companies for the previous two years was 40%, compared to a return for the NASDAQ 100 of 36.9% and only 28.5% for the S&P500.

ESG Portfolio Performance Over 2 & 5 Years

ESG Investment2 Year Performance5 Year Performance
Stock Rover Top 20 ESG Stocks+40%+113%
S&P500 Index+28.5%+77.3%
NASDAQ 100 Index+36.9%+108%

 

5 Year ESG Portfolio Performance

If we take a look even further back, we can see that the 5-year return for this Stock Rover ESG portfolio was 113%, compared to 108% for the NASDAQ 100 and 77.3% for the S&P500.

ESG Portfolio Performance 5 Years
ESG Portfolio Performance 5 Years

Interestingly, some of the best companies in America are pushing hard to improve their ESG profile, so it is not surprising that the ESG portfolio performs well.  What is surprising is that ESG companies can outperform the market.

Stock Rover Top 20 ESG Stocks

TickerCompanyMSCI ESG ScoreMSCI ESG RatingSustainalytics Risk Score
NEENextEra EnergyAAALeaderHigh Risk
MMM3MAAALeaderHigh Risk
ECLEcolabAAALeaderHigh Risk
CRMSalesforce.comAAALeaderLow Risk
AAgilent TechnologiesAAALeaderLow Risk
NVDANVIDIAAAALeaderLow Risk
MSFTMicrosoftAAALeaderLow Risk
GOOGLAlphabetAALeaderMedium Risk
EWEdwards LifesciencesAALeaderMedium Risk
PGProcter & GambleAALeaderMedium Risk
HDHome DepotAALeaderLow Risk
BLKBlackRockAALeaderMedium Risk
VRTXVertex PharmaceuticalsAALeaderMedium Risk
GILDGilead SciencesAALeaderMedium Risk
MAMastercardAAverageLow Risk
VVisaAAverageLow Risk
AAPLAppleAAverageMedium Risk
INTCIntelAAverageLow Risk
JNJJohnson & JohnsonBBBAverageHigh Risk
DISWalt DisneyBBBAverageLow Risk

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4. The CAN SLIM Stock Portfolio Example

CANSLIM is a stock investing strategy designed by William J. O’Neil to produce market-beating profit performance. Using the CAN SLIM criteria in your investing should mean profitable returns. Current Earnings, Annual Earnings, New Products, Supply, Leaders, Institutional Sponsorship & Market Direction are vital criteria.

CAN SLIM has the following stock selection criteria:

  • C – Current Earnings
  • A – Annual Earnings
  • N – New Products or Management
  • S – Supply and Demand
  • L – Leaders
  •  – Institutional Ownership
  • M – Market Direction

CANSLIM Historical Results – CANGX ETF

The CAN SLIM Select Growth Fund (Ticker: CANGX) was established in 2005 to implement the CANSLIM Select strategy into an ETF so that investors can simply by the ETF rather than implement the strategy themselves.  This is a great idea, except for the fact that the CANGX fund does not exhibit the expected 0.94% return per month higher than the underlying index.  In fact, from my calculations, it has trailed the S&P 500 by 0.79% per year.

CANGX CANSLIM ETF Historical Performance - Lags the S&P 500
CANGX CANSLIM ETF Historical Performance – Lags the S&P 500 – Chart TC2000

This does not necessarily invalidate the strategy; it simply implies that the strategy relies on good portfolio management, and the process of rotating the stocks in and out of the portfolio needs to be improved.  Also, the cash allocation is important; if you only allocate75% of the cash and the rest is in bonds, you may miss out on price moved.  Additionally, during the stock market downtrends, you need to move to cash as the M in CANSLIM (Market Direction) suggests.  If you do not do this on time, you may suffer additional losses.

The CANSLIM Stock Portfolio Example

TickerCompanyIndustryPriceGrowth ScoreGrowth Industry Decile1Y Return vs. S&P 500EPS 1-Year Chg (%)
BGAIFBioGaiaDrug Manufacturers – Specialty & Generic$67.8092150.80%-0.50%
BOLIFBolidenOther Industrial Metals & Mining$30.00811-16.20%-16.10%
EKTAFElektaMedical Instruments & Supplies$13.67951-11.10%-1.90%
EUXTFEuronextFinancial Data & Stock Exchanges$118.30241038.80%-10.80%
FDXFedExIntegrated Freight & Logistics$255.3392264.50%325.80%
JOBS51jobStaffing & Employment Services$78.53912-5.80%-8.80%
NWC.TOThe North West CoGrocery Stores$36.2870419.20%21.60%
SEOJFStora EnsoPaper & Paper Products$13.7962513.70%10.80%
SKSBFSkanskaEngineering & Construction$21.50892-1.40%25.60%
UPNRFUponorBuilding Products & Equipment$17.2080457.40%35.70%
YMDAFYamada Denki CoSpecialty Retail$5.428725.30%119.20%
Summary78319.60%45.50%

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To summarize, there is plenty of positive testing to prove the system is beneficial to investor’s performance, but how you manage the buying and selling of stocks will be the big differentiator in profits.

Use a CANSLIM Stock Screener Strategy To Beat the Market


5. Greenblatt’s Magic Formula Example Portfolio

This market-beating system is provided by the investing legend Joel Greenblatt in his best selling book “The Little Books that Still Beats the Market”.The Little Book That Still Beats the Market

The strategy Greenblatt shares is called the Magic Formula, based on two specific formulas, now known as the Greenblatt ROC and the Greenblatt Earnings Yield.

I have backtested this system personally, and it works very well, it is a little high maintenance, but the lessons contained within the book are vital.

Greenblatt Return on Capital Ratio

Good Companies Make Great Use of Assets!

This variation of Return on Capital takes Earnings before Interest & Taxation (EBIT) as a percent of Net Property, Plant, and Equipment (PPandE) plus Current Assets.

Greenblatt Earnings Yield

This variation of earnings yield compares Earnings Before Interest & Taxation (EBIT) to Enterprise Value. Joel Greenblatt uses it in his bestselling book The Little Book That Beats the Market

Using the Magic Formula to Find Stocks

You can register with https://www.magicformulainvesting.com/, the website that accompanies the book, to get free access to a very basic stock screener that implements the magic formula.

The problem is that the site provides no ability to change screener parameters or help you specify your own filters for companies. Also, it will not help you track which companies you want to invest in or show your past performance or any real financial data.

How to Utilize the Magic Formula

Stock Rover has the Magic Formula Screener built-in and available for Premium Plus Members.

You will need a Premium Plus Membership, which gives you access to all the criteria and the database with a unique 10-year history.  It will also allow you to implement all our Warren Buffett screeners and our full list of stock screening strategies and our Dividend growth and dividend yield strategies.

Importing the Magic Formula Strategy into Stock Rover

Importing the Magic Formula Screeners into Stock Rover
Importing the Magic Formula Screeners into Stock Rover

The Magic Formula Criteria

Joel Greenblatt specifically suggests you should sell all your “Magic Formula” stocks at the end of the year, re-run the screener and buy the newly recommended shares on the first trading day of the new year, to achieve the market-beating results.

The Magic Formula Criteria Implemented into Stock Rover
The Magic Formula Criteria Implemented into Stock Rover

Stocks in the Magic Formula Portfolio

TickerCompanyIndustryPriceGreenblatt ROCGreenblatt Earnings Yield1Y Return vs. S&P 500
AMEHApollo Medical HlgsMedical Care Facilities$17.1634.50%23.30%-22.90%
ANTMAnthemHealthcare Plans$260.39250.80%10.70%-4.70%
ASRSoutheast Airport GroupAirports & Air Services$111.3799.00%11.00%-40.50%
BIGBig LotsDiscount Stores$48.9423.90%29.50%101.90%
BIIBBiogenDrug Manufacturers – General$286.4760.70%15.20%9.80%
BIOBio-Rad LaboratoriesMedical Devices$518.0190.10%16.80%37.70%
BIO.BBio-Rad LaboratoriesMedical Devices$516.5790.10%16.60%37.00%
BPMPBP Midstream PartnersOil & Gas Midstream$9.44107.00%15.70%-42.80%
CHRSCoherus BioSciencesBiotechnology$18.5729.40%16.10%-25.70%
CICignaHealthcare Plans$166.31194.50%9.20%-4.00%
CNNECannae HoldingsRestaurants$35.53118.90%65.40%10.70%
CPRXCatalyst PharmaceuticalsBiotechnology$3.1332.60%20.90%-56.10%
EAFGrafTech InternationalElectrical Equipment & Parts$7.4960.80%21.00%-56.00%
GLIBAGCI LibertyTelecom Services$81.8969.20%10.50%17.70%
GTSTriple-S ManagementHealthcare Plans$17.8862.50%22.80%12.00%
HUMHumanaHealthcare Plans$406.36238.00%9.20%40.20%
INVAInnovivaBiotechnology$10.6071.80%34.70%-9.30%
KIMKimco RealtyREIT – Retail$11.5696.20%11.90%-55.70%
LEGHLegacy HousingResidential Construction$13.4354.80%11.30%-31.60%
MOMOMomoInternet Content & Information$13.9630.10%20.10%-70.90%
MSGNMSG NetworksEntertainment$10.1982.40%19.90%-54.00%
PDMPiedmont Office RealtyREIT – Office$14.07191.80%12.80%-44.70%
PRDOPerdoceo EducationEducation & Training Services$12.3829.10%23.80%-36.40%
REGIRenewable Energy GroupOil & Gas Refining & Marketing$45.8140.30%36.70%212.30%
SBRSabine RoyaltyOil & Gas E&P$29.85558.30%9.60%-39.30%
SCPLSciPlayElectronic Gaming & Multimedia$16.5464.40%63.90%41.30%
SHLXShell Midstream PartnersOil & Gas Midstream$9.2561.20%11.20%-63.60%
SUPNSupernus PharmaceuticalsDrug Manufacturers – Specialty & Generic$20.6729.10%16.00%-39.50%
VHCVirnetX HldgSoftware – Infrastructure$5.0859.70%196.30%-8.70%
WLKPWestlake ChemicalChemicals$19.6127.60%34.30%-22.50%

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6. The FAANG Stocks Example Portfolio

Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG), formerly Google, are five of the fastest-growing stocks in history.

FAANG is attractive because the FAANGs have a high margin of safety because of their huge market capitalizations. Three FAANGS, Apple, Alphabet, and Amazon had market capitalizations exceeding $1 trillion on September 4, 2020.

People buy FAANGs because they think their money is safe and will grow.

TickerCompanyValue ScoreGrowth ScorePrice1Y Return vs. S&P 5002Y Return vs. S&P 5005Y Return vs. S&P 500
AMZNAmazon.com5299$3,153.9466.40%36.90%409.70%
FBFacebook66100$257.3627.90%32.60%85.40%
GOOGLAlphabet7399$1,460.032.50%1.00%35.90%
MSFTMicrosoft6799$209.4136.90%68.30%332.70%
NFLXNetflix55100$487.5270.30%8.40%285.20%
Summary609952.40%30.80%280.30%

7. The Bill Gates Portfolio Example

Well, I am certainly not saying Bill Gates is an investing genius, but he is a genius none the less. I have a huge amount of respect for Mr. Gates; not only is he one of the world’s richest men, but he has given so much back to the world not just in monetary measure but in his time and effort. The amount of lives he and Melinda have helped save is countless.

Bill has some very interesting stocks in his portfolio, and as you can imagine, Microsoft, Apple, and his great friend Warren Buffett’s Berkshire Hathaway stocks are in his portfolio.

But how is the performance of Mr. Gate’s portfolio? Well, according to Stock Rovers excellent portfolio backtesting and performance comparison charting, Bill has managed to beat the S&P 500 by 54% since 2007, which is impressive.

Bill Gates Portfolio Performance 13 Years from 2007
Bill Gates Portfolio Performance 13 Years from 2007

We do not know the origins of Bill Gate’s investing methodology, but we can be sure he has been influenced by Warren Buffett and his history as a technology mogul.

The Bill Gates Stock Portfolio

TickerCompanyValue ScoreGrowth ScorePrice5Y Return vs. S&P 500
AMZNAmazon.com5299$3,148.53409.20%
BABAAlibaba Group Holding6398$275.15274.40%
AAPLApple7693$113.35236.40%
CATCaterpillar7469$149.7177.40%
WMWaste Management6886$114.3662.10%
CCICrown Castle Intl5495$162.3856.60%
WMTWalmart8987$137.3751.10%
CNICanadian National Railway7081$106.9717.40%
UPSUnited Parcel Service6791$171.3111.80%
ECLEcolab7980$200.180.10%
FDXFedEx7392$257.49-2.80%
TWTRTwitter5371$43.71-18.40%
BRK.BBerkshire Hathaway8183$215.19-25.40%
ARCOArcos Dorados Holdings4353$4.28-36.90%
CashCash$1.00-91.60%
KOFCoca-Cola Femsa8480$40.77-121.90%
LBTYKLiberty Global7858$20.78-139.10%
LBTYALiberty Global7853$21.17-141.90%
LILALiberty Latin America6972$8.35-166.50%
LILAKLiberty Latin America6969$8.30-166.60%
TVGrupo Televisa8866$6.20-168.10%

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8. The NAMPOF Stock Portfolio Example

A FAANG alternative is a basket of tech stocks composed of NVIDIA (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), PayPal (NASDAQ: PYPL), Oracle (NYSE: ORCL), and Facebook (NASDAQ: FB). I call this portfolio the NAMPOF.

NVIDIA, Apple, Microsoft, and Oracle are in the NAMPOF Stock Portfolio because those stocks pay dividends. I consider Oracle, Microsoft, PayPal, and NVIDIA value investments because they are relatively cheap and underappreciated by the markets.

The NAMPOF Stock Portfolio

TickerCompanyValue ScoreGrowth ScorePrice1Y Return vs. S&P 5005Y Return vs. S&P 500
AMZNAmazon.com5299$3,154.0266.40%409.70%
FBFacebook66100$255.9927.90%85.40%
GOOGLAlphabet7399$1,454.532.50%35.90%
MSFTMicrosoft6799$209.0536.90%332.70%
NFLXNetflix55100$484.1270.30%285.20%
NVDANVIDIA62100$513.12175.70%2041.80%
ORCLOracle7982$60.27-1.10%-10.30%
PYPLPayPal Holdings6699$190.4967.50%372.70%
CashCash$1.00-14.80%-91.70%
Summary619967.10%498.70%

9. High Growth Dividend Stocks Portfolio

Do you want to find companies that are continually raising their dividends?  It is a wise move as businesses that have a significant dividend growth are usually growing sales and market dominance.

What if you could find companies that have experienced dividend growth over the last ten years and that on sale at bargain-basement prices by the stock market?  This is called Dividend Growth + High Margin of Safety.

10 Year Dividend Growth Strategy

10 Year Dividend Growth Screening Criteria

  • Dividend Yield > 1.5%
  • Dividend 1 Year Change > 8%
  • Dividend 3 Year Change > 8%
  • Dividend 5 Year Change > 8%
  • Dividend 10 Year Change > 8%
  • Payout Ratio >10 < 40
  • Sales 5 Year Average (%) > 4%
  • Margin of Safety > 0

The Dividend Kings or Dividend Aristocrats strategy essentially means investing in companies that have a long history of continually paying and increasing dividends.

For this, you will need a stock screener with a significantly sizeable historical database (at least ten years) of earnings and dividend payments, such as Stock Rover.

The criteria shown here is the calculation for a 10-year period.

Dividend Growth Criteria Explanation:

  • Dividend Yield > 1.5%.  This is a simple filter designed to ensure only companies actually paying a dividend above 1.5% are listed. Anything less than 1.5% will not even payout in line with inflation.
  • Dividend 1 Year Change > 8%. Here we want to see only companies who have increased dividends in the last fiscal year of over 8%.
  • Dividend 3 Year Change > 8%. Next, we filter down to those companies that have at least an average increase of 8% over the last three years.

    Dividend Growth Screener - Criteria Implemented Into Stock Rover
    Dividend Growth Screener – Criteria Implemented Into Stock Rover
  • Dividend 5 Year Change > 8%. Again, only those companies increasing dividends more than 8% over the last five years.
  • Dividend 10 Year Change > 8%. You get the idea. 🙂
  • Payout Ratio >10 < 40. The payout ratio is designed to ensure the company is making enough profits to continue to pay the dividends and sustain the increases.  You can reduce the “<10” to see more stocks in the scan. We do not want to see companies paying more than 40% of their profits out in dividends; they do need to retain cash flow for future growth and capital investments.
  • Sales 5 Year Average (%) > 4%. This is designed to ensure that the company is indeed increasing sales, at least on average, to pay for the above growth in dividends.
  • Margin of Safety > 0(Exclusive to Stock Rover) For me, the most important criterion of all, the Margin of Safety, using Warren Buffett’s calculation, the forward discounted cash flow (see our article on Intrinsic Value).  Essentially, the higher the margin of safety, the more of a discount you are buying a stock for.

These criteria would typically return a list of only 5% of the NYSE or NASDAQ listed stocks.

Stocks in a High Dividend Yield Portfolio

TickerCompanyPrice5Y Return vs. S&P 500Dividend YieldDividend Per ShareEarnings YieldReturn on Equity
AGMFederal Agricultural$66.5793.40%4.80%$3.2011.80%10.30%
GRP.UGranite REIT$57.0270.30%3.90%$2.208.10%10.10%
AGM.AFederal Agricultural$58.6965.10%5.50%$3.2013.40%10.30%
AQNAlgonquin Power$14.3262.50%4.30%$0.626.80%12.40%
NRGNRG Energy$29.6820.60%4.00%$1.2055.00%239.40%
STLDSteel Dynamics$29.814.90%3.40%$1.008.40%12.90%
JPMJPMorgan Chase$95.29-13.00%3.80%$3.607.80%8.90%
OGSONE Gas$69.08-14.50%3.10%$2.165.10%8.50%
CSCOCisco Systems$38.84-15.90%3.70%$1.446.80%29.60%

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10. Warren Buffett’s 90/10 Portfolio Example

In his 2013 Letter to Shareholders, Buffett proposed a simple hybrid portfolio for ordinary people.

Buffett’s model portfolio consists of 90% S&P 500 stocks and 10% short-term government bonds. Buffett designed this defensive portfolio for the average investor whom he thinks need asset protection more than growth.

Buffett recommends investors buy a low-cost S&P 500 Index fund for the stocks, but you could use the same strategy for value stocks. The danger with the 90/10 Portfolio is that it relies on American stocks.

In today’s world, a 90/10 portfolio with 30% US stocks, 30% European Stocks, 30% Chinese stocks, and 10% bonds could be a good idea. Global diversification could be a smart strategy because coronavirus demonstrates how vulnerable national and regional economies are to outside threats.


11. Bernstein’s No Brainer Stock Portfolio

Bernstein recommends this simple strategy in his book The Intelligent Asset Allocator. Bernstein bases his plan on academic research and historical performance. He designed the No Brainer Portfolio for long-term performance.

The No Brainer Portfolio consists of 25% Bonds, 25% European stocks, 25% US small-cap stocks, and 25% S&P 500 stocks. Simplicity is this strategy’s advantage.

The disadvantage to the No Brainer Portfolio is high exposure to the risks of Europe and the US small-cap market.

Today a person could modify the No Brainer by replacing the US small-cap stocks or the European stocks with 25% Chinese stocks.

Another strategy could be to replace the European or US Small Cap stocks with emerging markets stocks.


12. Diversified Stock Portfolio Example

Paul Merriman thinks investors need to diversify among asset classes to protect their assets.

To that end, Merriman offers a simple formula for buying stocks by asset class. Merriman proposes dividing the portfolio by ten and making 10% of investments in different kinds of stock.

Here’s Merriman’s proposal:

  • 10% S&P 500
  • 10% US Large-Cap Value
  • 10% US Small-Cap Blend
  • 10% U.S. Small Cap Value
  • 10% US REITs
  • 10% International Large Cap Blend
  • 10% International Large Cap Value
  • 10% International Small Cap Blend
  • 10% International Small Cap Value
  • 10% Emerging Markets

The advantage of this model is that it is simple and provides a high level of diversification. The diversification protects assets and limits exposure to many risks.

The disadvantage of Merriman’s proposal is that it will only generate gains small. An investor could miss big share value growth in the S&P 500 or the Nasdaq 100. This portfolio could also lock in risks from small caps or REITs.


13. The Ivy League Stock Portfolio Example

America’s famous Ivy League Universities are among the world’s largest and most successful private investors. Forbes writer Simon Moore thinks ordinary people can make money by copying the portfolios of Harvard, Yale, and Stanford.

The three universities’ portfolios include 35% US Stocks, 28% bonds, 15% foreign stocks, 11% commodities, and 11% real estate. The advantage of this portfolio is that it puts most of the money in the investment with the highest growth US stocks.

The disadvantage to the Ivy League Portfolio is that you will need to invest in more complex investments, including commodities. Thus, an Ivy League portfolio is a good choice for high-income individuals.

An investor could modify the Ivy League Portfolio by eliminating real estate and commodities. The investor could replace the real estate with REITs and the commodities with stock in commodities producing businesses such as oil companies or commodities Exchange Traded Funds (ETFs).


Stock Portfolio Examples Summary

The team and I sincerely hope you find inspiration from these examples of winning stock portfolios. What inspiration did c you get from this article? Share your thoughts in the comments below.

13 Legendary Strategies to Beat the Market That [Really] Work

 

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