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Portfolio, The Warren Buffett Way

 

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Amidst the United Kingdom exiting the EU and DOW Jones dropping each day after the Brexit; there is still a silver lining in all this stock exchange mess. There has been a history of raising with big percentages the year after. To add to Brexit, during Presidential election years, the market tends to drop then rise again. I look to see stock soar next year no matter who the president is. Right now seems to be an excellent time to buy stock and expand your portfolio. It is a good time to buy after a market plummet. If you decide to invest in some stocks soon, here is my top 5 stock choices.

Businessman holding a transparent screen with an inscription a t
Businessman holding a transparent screen with an inscription a top five. Business, technology, internet and networking concept.

The top five portfolio of common stocks I will put together whose stock is traded on the New York Stock Exchange will be on Warren Buffet’s top 10 list of dividends paid in 2016. According to The Street, each of Buffett’s top 10 “comprises at least 0.8% of his public equity portfolio and has a dividend yield of 2.5% or higher” (The Street, Page 2).

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I think it is smart to at least take a look at Warren Buffett’s portfolio and the decisions the multi-billionaire is making. My first decision will be to add General Motors (GM) which pays $0.38 per share quarterly yielding 5.27% and a Beta of 1.73 providing great returns as of late. My second stock to add to my portfolio will be IBM (IBM) which pays out $1.40 per share and yielding 3.8%. The Beta for IBM is 0.71 revealing low risk and providing solidity and safety to my portfolio, but also decent dividends paid. My third stock to add to my portfolio will be Phillips 66 (PSX) which has recently increased their dividends to $0.63 and is yielding 3.2%. I honestly did not know anything about Phillips 66 until I found out that Warren Buffett has been purchasing hundreds of millions worth of stock with them. Phillips 66 is an energy manufacturing and logistics company with a Beta of 1.49 which is mostly betting on the four segments of midstream, chemicals, refining, and marketing and specialties.

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My fourth stock will be Wells Fargo (WFC) which is a company with a long history of paying dividends. Wells Fargo lowered their dividends to five cents during the 2008 market crash, but has since increased it to $0.38 yielding 3.25% dividends. This stock is Warren Buffett’s second largest stock holding in his portfolio revealing some trust in this stock with a Beta of 0.94. My fifth stock I will be investing in will be Coca-Cola (KO) my favorite beverage to drink; as Warren Buffett says about Coca-Cola “I’m the kind of guy who likes to bet on sure things, no business has ever failed with happy customers – and you’re selling happiness” (The Street, Page 6). The Beta for Coca-Cola is 0.53 and paying dividends of $0.35 yielding 3.11%. Coca-Cola has paid quarterly dividends since 1920 and has increased dividends every year for the last 50 years. Warren Buffett owns over 400 million shares of Coca-Cola compiling 14.4% of his public equity portfolio.

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My Portfolio                           Beta                Dividends Per-Share          Current Ticket

 

General Motors (GM)           1.73                $0.38 Quarterly                     $ 29.02

IBM (IBM)                               0.71                $1.40 Quarterly                     $151.06

Phillips 66 (PSX)                 1.49                $0.63 Quarterly                     $ 79.43

Wells Fargo (WFC)              0.94                $0.38 Quarterly                     $ 46.85

Coca-Cola (KO)                    0.53                $0.35 Quarterly                     $ 45.31

 

My portfolio will have some solid ground to stand on with decent dividends paid per quarter. My portfolio also has a couple high risk high reward stocks which seem to show a promising return in the near future. My portfolio reflects Warren Buffett who is the billionaire known as “The Oracle of Omaha.” Many people follow his footsteps when it comes to investing.

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In my portfolio each company will have a portfolio weight of 20%.

 

General Motors (GM) has a 0.346 beta weight in my portfolio.

IBM (IBM) has a 0.142 beta weight in my portfolio.

Phillips 66 (PSX) has a 0.298 weight in my portfolio.

Wells Fargo (WFC) has a 0.188 weight in my portfolio.

Coca-Cola (KO) has a 0.106 weight in my portfolio.

 

My overall Beta for my portfolio would be 1.08 revealling a relatively safe portfolio with some possible nice returns.

 

Emily Stewart. (2016, May 17). The Street. Investing. In Warren Buffett’s Top 10 Dividend-Paying Stocks for 2016. Retrieved from https://www.thestreet.com/story/12825278/2/warren-buffetts-top-10-dividend-stocks.html

 

Forbes. (2016, June 14). Forbes. The Richest Person In Every State. In The Little Black Book of Billionaire Secrets. Retrieved from http://www.forbes.com/profile/warren-buffett/

 

CNN Money. (2016). Markets. In Market Quote. Retrieved from http://money.cnn.com/quote/quote.html?symb=KO

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