2010 First Quarter Update - Model Retirement Portfolio

The Model Retirement Portfolio performed very well and produced a total return of over 7% in the first quarter of 2010. The Portfolio return can be seen here: Model Investment Portfolio's - April 15, 2010.

The two biggest Portfolio winners have been Bank Of America and General Electric. The big moves in the first quarter in these two stocks have made them over-valued in the short term and have made us decide to take some profit.     

Bank Of America had a great performance in the first quarter with a return of more than 13%.  However, the easy money has been made in this stock and we would reduce our position by selling (500 shares) at 20. We will place a good to cancel order at that price.  Longer term, Bank Of America is a 30 dollar stock with a nice potential dividend.and we will continue to hold our remaining 500 shares of Bank Of America common stock for the long term.

General Electric has been a big winner with the stock up over 20% in the first quarter. The stock is fully valued on a short term basis at a price of 20. We are placing a good to cancel order at the price of 20 for our entire 500 share position. The company still has a lot of credit risk on its balance sheet and further upside in the short term is limited.

Abbott Labs was down 4% in the first quarter as health care stocks struggled with the industry reform bill which recently passed in Washington D.C.  Abbott Labs remains a blue chip company with an excellent dividend yield and good future growth prospects. The shares should be held for the long term.

Florida Power And Light was the biggest loser in the Retirement Model Portfolio in the first quarter of 2010. The company was the victim of a rate decision in Florida that went against the company's long term growth plans. The weakness in the share price will be temporary since the company is one of the  largest provider of alternative energy in the country. It is well positioned for long term growth and pays an excellent dividend for us to to wait. 

BP Plc Adr is a long term core holding in the energy sector. The stock increased by more than 4% in the first quarter. The firm has a leading international position in oil, gas and alternative energy. A greater than 5% yield and an excellent balance sheet makes this company suitable for any retirement account.

Automatic Data Processing (ADP) is another undervalued firm perfectly positioned for a retirement portfolio. Like BP, the portfolio holding increased by 4% in the first quarter of 2010. An excellent dividend and a pristine balance sheet make the stock a core long term holding in the Model Retirement Portfolio.

Pepsico is a blue chip equity in the beverage and the snack food industry. Pepsico increased by nearly 10% in the Model Retirement Portfolio in the first quarter of 2010. The growth outlook for the company is very positive and Pepsico has just increased the stock dividend. Pepsico continues to be a core holding for growth and Income in the Model Retirement Portfolio.

Vodafone has a short term catalyst that could dramatically boost the share price in the next several months. Verizon has been in discussions with Vodafone for a resumption of the Vodafone dividend from Verizon Wireless.  The stock has been a winner by over 9% during the first quarter and further gains in the share price are ahead.

Sprotts Physical Gold Trust gained nearly 6% in the first quarter of 2010. The Trust holds gold bullion and will appreciate with the price of the metal. The Trust makes a fine inflation hedge in the Model Retirement Portfolio. 

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