$53,521.99 | Growth + High Yield

Hey guys,

It’s time to reveal my 2022 Roth IRA portfolio! I’ve got a reveal of my first portfolio slice, as well as my portfolio’s overall performance vs. the S&P 500 so far this year.

My strategy this year is similar but not exactly the same as last year.

This year, I’ve made a commitment to invest a higher percentage of my money in my highest-confidence companies. This doesn’t mean that I will beat the market, it just means that I’m. I like all of the companies in my portfolio, but I especially like the ones I’m the most heavily invested in.

As a reminder, my portfolio each year consists of five portfolio slices that serve different purposes. Within each of these slices the strategy is consistent, but the companies that make up that slice can vary.

If you want an in-depth explanation of each portfolio slice and its purpose, take a look at my Roth & Roll Manifesto post here.

As a reminder, here are the portfolio slices that make up my Roth IRA every year:

  • Growth + High Yield (30%)
  • Moonshot Growth (20%)
  • Stable Yield (20%)
  • Growth 1st, Dividend 2nd (15%)
  • REIT (15%)

The Growth + High yield portion of my portfolio is somewhat self-explanatory. I’m looking for companies in this section of my portfolio that are both growing (revenue + earnings growth) and that pay a strong dividend. The typical stock in this portfolio slice is growing while also delivering a dividend above the S&P 500 average of 1.3%.

Here are the investments that make up my Growth + High Yield portfolio slice for my 2022 Roth IRA:

  • Overall Slice | Dividend Yield: 3.00%
  • Intel (INTC) – 20% | Dividend Yield: 2.92%
  • JP Morgan Chase (JPM) – 15% | Dividend Yield: 2.45%
  • Broadcom (AVGO) – 10% | Dividend Yield: 3.20%
  • Ally Financial (ALLY) – 5% | Dividend Yield: 2.03%
  • Archer Daniels Midland (ADM) – 5% | Dividend Yield: 1.96%
  • Blackrock (BLK) – 5% | Dividend Yield: 2.12%
  • CVS Health (CVS) – 5% | Dividend Yield: 1.95%
  • Gladstone Investment Corporation (GAIN) – 5% | Dividend Yield: 5.25%
  • Horizon Bancorp (HRZN) – 5% | Dividend Yield: 2.69%
  • Invesco (IVZ) – 5% | Dividend Yield: 2.22%
  • Main Street Capital – 5% | Dividend Yield: 5.72%
  • Novartis (NVG) – 5% | Dividend Yield: 3.74%
  • Pfizer (PFE) – 5% | Dividend Yield: 3.05%
  • Walgreens (WBA) – 5% | Dividend Yield: 3.83%

I have a total of 30% of my Roth IRA invested in these companies. I made a decision with my portfolio this year to focus on specific sectors of the market because I feel confident they would help me to outperform.

This year, you’ll notice my portfolio is overweight in the financial sector (again), healthcare, semiconductors and also companies with very strong brand allegiance.

On a macro level, I invested in companies more heavily that have a good ESG footprint (environmentally conscious companies) and companies that are able to sustain an inflationary environment. I also underweighted companies who have a large amount of exposure to China. I see US companies who get a large percentage of their profits from China as a risk that the market may not be paying as much attention to as it should in the upcoming 5-10 years.

For example, I would have invested more heavily into Apple and Starbucks this year, but I worry that China will use American businesses there as a bargaining chip at some point in the near future. This may not happen, but I’m seeing tensions only go up, so I’m positioning my portfolio accordingly.

Now that you’ve seen the reveal of my first portfolio slice for 2022, let’s see how I’m going in comparison to the market so far this year.

We’ve got to update our formula to calculate returns this year. I’ll be calculating share price appreciation return as well as overall return and comparing it to the S&P 500 (VOO).

Total share price appreciation as of Feb. 12th:

  • S&P 500 from Jan. 5th, 2022 – Feb. 12th, 2022: -5.97% (404.94-430.66) / 430.66 x 100
  • My Portfolio from Jan. 5th, 2022 – Feb. 12th, 2022: -7.17% ((((53,521.99 – 1,200 – 141.99) – 56,210.80) / 56,210.80) x 100)

Total return as of Feb 12th:

  • S&P 500: –5.76%
  • My Portfolio: -6.75%

I’m lagging the market so far after about a month or so of this year in overall return. by just under one percentage point.

I was ahead of the market in overall return by almost 4% with last year’s portfolio around this time but finished just behind at the end of the year. A year is a long time, so there’s plenty of time for this portfolio to catch up.

If you’d like to learn more about why I chose Intel (INTC) as my highest conviction stock in this portfolio slice this year, check out this stock snippet that I wrote about them last year.

I will reveal the other slices of my portfolio in the next few posts as I track this year’s performance against the market. Happy investing everybody!

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