History of a [mostly] dividend-stock buy and hold portfolio.

This is an equity portfolio I’ve been solo managing for 16+ years. I started buying about two days after the bottom of the GFC, but very small size to begin. I purchased consistently throughout 2009, 2011 and early 2013. Later, as opportunities arose, added new blue-chip names to the portfolio.

The two non-dividend stocks we purchased were Google in 2015 [now has one] and BRK. All US holdings. Over the time period of purchases from 2009 – 2022 I invested just under $12.1 million.

Portfolio earned dividends of $11.6m, and a total excess compound annual return of 123 basis points above the S+P 500 thru Monday. Pretty good for a 16+ year run.

This was not a tech-heavy portfolio, the only Mag7 stocks owned were Google and Apple, and Apple wasn’t bought until Covid hit. No Meta, no Netflix, no Tesla. I invested in every sector of the market, although not equally. All of the stocks are/were well-known.

The biggest contributors to our performance were, in order: Google, Eli Lilly, Blackrock, AbbVie, Phillip Morris and JPMorgan. They accounted for half of our profits of the 35 holdings. Our dividends have grown by over 4.1% per annum. The div yield on my first LLY buy is now 9+%, as one example.

Aha, but what if you didn’t start to invest at the bottom of the GFC? Then what…?

10 year return we beat the S+P 500 by 43 bps a year. I’ll take it. Against more appropriate S+P 500 value indices we're killing it, up almost 250bps a year.

Less risk and lower vol as well. If we were willing to lend out our equities, that’d be even higher outperformance.

The portfolio is trailing over the past one year, given the huge rallies in Nvidia, Meta, Netflix, et al but over the past 3 months we are ahead by 285 bps, which is nice.

No portfolio will outperform all of the time, the goal is not to outperform in any specific calendar year. Of course, for most non-professionals, indexing is way easier.

Some lessons for all:
1) Buy and Hold still works. No manager fees, no trading tax drag, no slippage, et al.
2) You can do well just owning blue-chip divy payers. You don’t need to be a genius or find some overlooked small-cap and hope it 10x.

3) Good entry points obviously help. Keep some cash on hand! Buying JPM when it was out of favor has led to 267 bps of annual outperformance, as just one example.
4) Conversely, you don’t need to chase the hottest stocks to beat the market.

5) Highly appreciated stocks are perfect for charitable donations.