The Preferred Five
This approach combines high yield and low price Dow Jones
Industrials with over a 60% better return than the High Yield 10. The same
$10,000 invested at the beginning of 1971 by January 1 1997 would have grow
to $1,064,600. A compound annual growth rate of 19.67%.
The Preferred Five approach uses 5 stocks; each stock represents 20% of the
portfolio. The stocks selected are the five DOW stocks with the highest
yield. If the lowest priced stock on the DOW is also the highest yielding
stock, it is eliminated and the stock ranked #6 is added. The list below has
already been altered to include that exception, if applicable. In such a
concentrated portfolio a strong stock can significantly improve the value of
your portfolio. Similarly, a weak stock can significantly weaken the value
of the portfolio. This approach has only had three losing years in a 26 year
study. The worst loss was 17% in 1990 followed by a 59% gain in 1991.
The following are the Preferred Five Dow Jones Industrial stocks.
Purchase equal dollar amounts of each these 5 stocks.. The table below shows you how many shares of each you buy
for every $10,000 you invest. Note you are buying equal dollar amounts NOT equal share amounts.
Hold these for 12 months.
Update your portfolio in a similar manner 12 months later.
Overview
