A 10-Stock Retirement Portfolio That's Whipping the Market

Two summers ago, I began an investing journey in full sight of our Foolish audience. Putting $40,000 of my own retirement money on the line, I picked 10 stocks to invest my money in.

Since then, seven out of 10 of those picks are outperforming the market. The lump sum has grown to $58,600. That's $4,360 -- about 11 percentage points -- more than I would have made by investing that money in the S&P 500, including dividends reinvested.

Below, you can see what those 10 stocks are, why the portfolio is doing so well, and which company from the group I think is an excellent buy at today's prices.

Company

Publication Date

Change

Performance vs. S&P 500 (percentage points)

Google

June 26, 2011

83.8%

45

Pricesmart 

June 28, 2011

93.9%

57

Baidu

Sept. 15, 2012

39%

5

Intuitive Surgical 

July 25, 2011

(7.4%)

(40)

National Oilwell Varco 

July 28, 2011

(1.2%)

(37)

Coca-Cola 

June 21, 2011

21.9%

(15)

Whole Foods 

July 5, 2011

91.8%

59

Amazon 

July 12, 2011

47.7%

10

Apple

June 30, 2011

49.2%

15

Johnson & Johnson 

Aug. 1, 2011

46.2%

9

       


Source: YCharts.

Two stocks lifting the portfolio
While it's easy to see which of these stocks have done the heavy lifting since the portfolio's inception, there are two that stick out as having an outsized influence over the past few months.

BIDU Total Return Price Chart

BIDU Total Return Price data by YCharts.

On several occasions, I've opined about whether or not Apple post-Jobs still had the innovative edge required to lead the technology field. Following Apple's announcement that the pricing strategy for the iPhone 5c and 5s might not incentivize profitable consumer decisions, I worried still.

And yet it seems Apple is more plugged in to customer demands than I thought. The company sold 9 million 5c units during their first weekend on the market. That, combined with updated guidance from the company that pointed to more revenue than expected, has helped the company bounce almost 25% since mid-summer.

Baidu, the Chinese search giant, has been the other big winner. It seemed like nothing could move the stock price higher for months. That is, until company announced that it had acquired China's largest third-party app distribution platform, 91 Wireless.

That moved signaled that Baidu was serious about monetizing mobile and becoming a more serious player in the field. Though competition is still a threat in the form of Qihoo 360, Baidu flexed its financial muscles with the purchase and reminded folks on Wall Street that it has far, far more cash on hand than any of its direct competitors.

This month's best buy
Though those two companies are certainly still worthy of further research, neither made the cut as this month's pick for the best buy from this portfolio. Instead, that designation goes to Google.

What big news makes Google such a great buy right now?

Actually, there isn't any. The company has been relatively quiet since announcing earnings. Analysts continue to harp on the fact that costs-per-click are still declining. That's fair, but when you take the growth in overall clicks into consideration, it's not that alarming.

More importantly, the company continues to defy the logic of pigeonholing it into any one industry category. While continuing to refine  its core search engine, Google has been grooming its Moto X smartphones to be the first in a family of smartphones, and even investing in biotech start-ups

Innovation is baked into the DNA of the company, and it has so many different potential avenues to remain profitable and relevant in the future that it dizzies the mind. I'm willing to pay a hefty premium for that type of innovation. That's why today's non-GAAP price-to-earnings ratio of under 22 and price-to-free-cash-flow ratio of 24 seems like a long-term steal to me.

Google's Secrets Could Make You Rich
If someone asked you why you should invest in Google, could you truly answer them? To be honest, few could, and this article barely scratches the surface. That's because most of Google's true value-drivers -- the ones that make savvy market-watchers rich -- often fly under the radar. If you want an edge on other Google investors, be sure to check out "5 Secrets to Google's Future" from The Motley Fool. This free guide includes actionable advice that you can put to use right now. Just click here now for instant access!

The article A 10-Stock Retirement Portfolio That's Whipping the Market originally appeared on Fool.com.

Fool contributor Brian Stoffel owns shares of Apple, Google, Coca-Cola, Johnson & Johnson, Amazon.com, Baidu, National Oilwell Varco, Whole Foods Market, Intuitive Surgical, and PriceSmart. The Motley Fool recommends Amazon.com, Apple, Baidu, Coca-Cola, Google, Intuitive Surgical, Johnson & Johnson, National Oilwell Varco, PriceSmart, and Whole Foods Market. The Motley Fool owns shares of Amazon.com, Apple, Baidu, Google, Intuitive Surgical, Johnson & Johnson, National Oilwell Varco, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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