Wow what an interesting year 2012 proved to be, I didn't sell one single stock in 2012, after all I am a buy a hold investor. The best part is the nice appreciation my portfolio experience. This is a wonder considering I constantly see in articles and news clips how buy and hold is dead, yet here we are. As agreed I started measuring since last May and the portfolio is performing fantastic.. In fact out of the 10 stocks purchased all are up except for one.
Yes it has been a fantastic run for the market in general but without a doubt since re-calibrating last May it's been a watch and collect business. Since last May the DJI has gone from 13,200 to about 13,800 where we stand now. This is an increase of about 5% yet my portfolio has appreciated 12% since the date. I have to admit this year I have decreased my ownership of American National Insurance Company. (ANAT)
Why would I reduce ownership in such a great company now that it has gone up you say? Well that's a simple answer, with Anat going up it has lost the main reason for me investing in it. To me Anat is a safe haven equity which I believe is similar to cash and it pays a great dividend, once the equity rises in value it loses it's safety net of being super cheap. As it sits near its 52 week high I felt it was wise to pull the majority out. Look American National is still selling cheap but not as cheap as before.. So what in the world are we to do with the funds freed by our recent decrease in position?
Enter Apple. As I reduced my position in American National I have moved the funds to a company selling cheaper than Anat as P/E and future earnings. I wrote a post on why I would choose Google over Apple back in April of 2011..
If I had bought Apple I would be up 32.17% plus dividends but I would have taken the high road. (The stock went much higher but has come down as I thought would happen due to decrease of expectations.) Google on the other hand would be up an astonishing 30.23%!!(sarcasm) As you can see both would have been pretty good investments resulting in over 15% a year growth in appreciation. I always put my money where my mouth is, so I purchased Google last time and now sit in a 25.59% appreciation but I purchased it in May of 2012 as I described in my previous post. I have constantly thought about the whole Apple vs Google vs Microsoft battle wondering who has the upper hand and I feel Microsoft will be the big loser of this battle with Google and Apple coexisting like Target and Walmart. Google will be similar to Walmart full of cheaper product selling much more than the competition while Apple will be similar to Target, more about the experience than the price.
So here we are now.. Will we enter a new bull or start a pull back? The question I believe is unanswerable but the idea of being prepared for both is not such a bad idea.