AAPL - Healthcare And Facebook Help Propel My 25 Stock ~$424K Portfolio To New Highs In April

2023-05-01 23:53:08 ET

Summary

• My portfolio, built specifically for my retirement ~20 years from now, features growth, dividends, and risk stocks for a happy retirement.
• Great performances by Arrowhead Pharmaceuticals and Meta propelled my portfolio again to all-time highs and market-beating returns in April of 2023.
• This is a portfolio built for individual investors to outperform the majority of money managers through diversity and risk with the goal to be worth at least $5-$7 million.

It is my firm belief that 80% of money managers can't outperform the S&P 500 Index ( SP500 ) over time due primarily to the fees they charge their clients. Each and every individual person intent on having the happiest retirement possible could and should take charge of their retirement portfolios and invest in simple index/mutual funds and/or a balanced portfolio like the one I have set up to maximize returns over decades of performance. My ratios and distributions are based on my book - Investing Better Than A Money Manager: The Rise Of Retail Investing.

Past Performance

Here is briefly how my portfolio has evolved from its inception in 2014, when I became more of an active investor in the markets, until now. Notice, I spent several years before 2014 putting some funds into the market now and then at random as I finished school and got married and started a family, etc., which I didn't really follow or record.

Contributions

Contributions make up a vital component of your portfolio, especially when you are starting out, as they are the building blocks of tax advantaged savings for retirement. The more money you have, the more concern you should have with taxes. This is why when you start out investing, you should try to add to accounts like IRAs ASAP instead of putting the money into regular taxable investment accounts.

Here is how my portfolio is performing compared to the SPDR S&P 500 Trust ( SPY ) over 2023.

Regular contributions to your retirement portfolio help your portfolio to grow even during less than ideal months where you fail to outperform the S&P 500. Not every month will be a winner, but regular contributions can help make anyone's performance look great over time.

My portfolio is divided up to start 2023 at around 75% stocks and around 25% mutual and index funds with the goal to increase stocks to over 80% of my portfolio over time. My current setup has swayed to around 80% domestic exposure and 20% international as I have pushed in a lot of my chips in on Petrobras ( PBR ). I have about 2.1% of my portfolio in bond mutual funds so that I know how they work and to have at least a little exposure to this sector over time. I plan to have bonds be a very small portion of my portfolio up to right around age 65. Diversification lifts my whole portfolio's returns over time, so finding the best stocks in every sector is a goal for me each and every year. Here are some of the main changes since my last portfolio article in March of 2023 .

Here are the details of my personal ~$424K portfolio then, based on values of approximately $40K, $400K, and $4 million broken down by sectors with brief descriptions of each stock in each sector. The best thing about my portfolio setup is that it is scalable so that people interested in following a similar path can set up their portfolios to follow my path no matter how small or large their holdings are. With fee-free trading and the advent of fractional shares, investors are more capable than ever in setting up amazing portfolios even when starting from scratch.

The Welsh Portfolio

The Information Technology Sector

Aim = 20% of my Stock holdings

1. QUALCOMM ( QCOM ) is a major technology solutions provider for companies like Apple ( AAPL ). At least for now. It will be an integral part of upcoming transformational secular revolutions like 5G. Its recent victories against Apple in court have boosted its value as Apple has had trouble shaking the company by trying to make its own chips. I always like to have at least one chip company in my portfolio at all times with a couple never a bad idea.

ACPS = $61.92

2. Dell ( DELL ) is a legacy holding which continues to aggressively seek M&A opportunities like the value acquisition of the $67B EMC deal and the spinoff of the hybrid cloud giant VMware ( VMW ) at the end of October 2021, which it formerly owned ~80% of the stock of. Michael Dell is a shareholder winner through and through and following in his stock footpaths I think is a good long-term decision. The VMware spinoff should allow Dell to deleverage significantly while allowing the free cash flow to hit its remaining debt burden opportunistically before Michael Dell moves on to his next future M&A opportunity. The sale of VMware to Broadcom ( AVGO ) potentially in 2023 could open up Michael Dell and Dell itself to lots of new opportunities now that it can officially cut all ties with VMware besides what is truly mutually beneficial to both parties.

ACPS = $21.52

3. VMware : I acquired VMware as a spin-off from Dell. Now I get to hopefully enjoy it being acquired by Broadcom for ~$61B. I plan at this time to opt in for receiving all Broadcom stock when the deal closes, but that won't be until later in 2023 most likely.

ACPS = $51.57

4. Advanced Micro Devices ( AMD ): Bought back into this stock late in 2022 as one of my favorite chip companies at a tremendous value in my opinion. I love the CEO Lisa Su and also its most recent deal to acquire Xilinx for ~$35B early in 2022. AMD continues to bully incumbents like Intel ( INTC ) relentlessly and I see AMD continuing to eat Intel's lunch in the coming years as well. More than doubled my shares of AMD in September of 2022 as I work to rapidly build this position up over the back half of the year. Added an additional 100 shares in October of 2022 as I want to build my technology sector back up towards 20% again.

ACPS = $79.70.

The Health Care Sector

Aim = 15% of my Stock holdings

5. Arrowhead Pharmaceuticals ( ARWR ) is a permanent large stock position in my portfolio as an RNAi juggernaut entering key Phase 2 and 3 trials in 2023. A lovely balance sheet with key partnerships with Johnson & Johnson ( JNJ ), Amgen ( AMGN ), Takeda ( TAK ), Horizon ( HZNP ), and a new ~$1 Billion licensing deal in November of 2021 with GSK ( GSK ) significantly de-risks its TRiM platform as it continues to expand into additional cell types. Amgen continues to slowly progress Olpasiran (AMG 890), its collaboration candidate with Arrowhead along with a successful Johnson & Johnson update in November 2021 on JNJ-3989 for hepatitis B virus. Takeda will help co-develop and co-commercialize Arrowhead's lead candidate ARO-AAT preparing Arrowhead for independent commercialization of its wholly owned candidates while it continues to find partners for new candidates like the recently revealed ARO-XDH with Horizon. Arrowhead partnered with GSK for its NASH candidate ARO-HSD, proving once again its TRiM platform is in big demand as it continues to expand its pipeline so fast that it can't progress all of its candidates by itself as a smaller sub $5B company.

A setback in its ARO-ENaC candidate led to a tremendous buying opportunity in the stock in 2021, which is still in effect in my opinion. ARO-ENaC is neither the company's lead product nor a very important one in Arrowhead's ever growing pipeline of candidates. Investors will have gotten an update on Arrowhead's pulmonary plans at the Pulmonary R&D day on May 26, 2022.

I originally used the ARO-ENaC debacle to expand my shares of Arrowhead from 410 shares up to 530 shares. I expanded my shares in Arrowhead again in January of 2022 by buying an additional 70 shares to bring my total up to 600 shares. I bought an additional 100 shares in May of 2022 bringing me up to 700 total shares. I am fine sitting on my current shares for a while as one of my largest positions. Here's a recent article I did on the data release at AASLD this last fall between Johnson & Johnson and collaboration partner Arrowhead.

A couple of good news items for Arrowhead stock in April of 2023 have helped the stock finally form some semblance of a sustained rally again. Almost back to back milestone payments from both GSK and Takeda set the stage for phenomenal lung data for its ARO-RAGE candidate with the company's R&D day coming up this summer on June 1st, 2023. Small biotechs can be in hibernation mode for years and then all of a sudden take off like a rocket. Here's to hoping this is just the start of a very nice run for this small ~$4B biotech as it charged up over 40% in April of 2023 alone.

ACPS = $45.56

6. Medtronic ( MDT ): Health care device maker that I think has significant upside from COVID-19 variants for years to come. Hospitals will need the best equipment companies like Medtronic as health issues from COVID-19 could and seem poised to persist for years.

ACPS = $83.13

7. Pfizer ( PFE ): A healthcare behemoth with a big stake in the fight against COVID-19. Seems like a great potential long-term winner at a great value compared to some of its peers as a leader in current health care concerns.

ACPS = $35.86

8. Eli Lilly ( LLY ): Sold most of these shares as I moved in on natural gas reaching lows it hasn't reached in years. This will be a position I build up right away after natural gas recovers a little. A great pipeline of drugs and a lot of amazing potential candidates including ones potentially for Alzheimer's as well as Mounjaro (tirzepatide) for diabetes which might see a new indication to treat obesity by the end of 2023 potentially which could be a game changer for weight loss.

ACPS = $317.75

9. Johnson & Johnson : A stalwart in the drug industry and a dividend king with an amazing track record of dividend growth makes a nice safe play in my portfolio of stocks of all types. The older I get, the more plays like JNJ make sense. The upcoming split into two companies will hopefully unlock more value for shareholders as the company's CEO looks to unlock additional value.

ACPS = $161.91

The Communication Services Sector

Aim = 12% of my Stock holdings

10. Disney ( DIS ) will crush Netflix ( NFLX ) in growth over the coming decades in my opinion, as its streaming platform continues to grow by leaps and bounds. The company has its ups and downs, but I think it's a major force moving forward for decades to come especially with the appointment of Iger back into the CEO position again. Bob Iger has been a blessing for the stock in the past and I see his changes turning the company's momentum around here pretty quickly.

ACPS = $171.78

11. Alphabet ( GOOGL , GOOG ): One of the FAANG names producing amazing results as always even in a bear market. I have a decent amount of exposure to the FAANG names with my mutual funds, but it is hard to have too much of these juggernauts. Not selling even after the recent disappointments.

ACPS = $104.94

12. Facebook ( META ) This tech giant has been absolutely obliterated over the course of 2022 as large tech companies in general faltered last year. It is looking more and more like Meta bottomed after its October 2022 earnings report, making my large purchase a potential phenomenal position over the coming years if it continues to recover. I'm a big fan of the Metaverse and its potential in the coming years and decades. Having a leader in the space with seemingly endless cash flow is never a bad thing.

Another huge month for META in April of 2023 meant that I have now doubled the value of my overly large Facebook position from when I bought it back in late 2022. The TikTok app looks to be in the current crosshairs of U.S. politicians potentially leading to less use of its app over time and potentially more use for similar apps like Facebook. Facebook might have more upside even after doubling over the past half a year as it continues to curtail costs and focus on efficiencies along with potential government inspired tailwinds. Its latest Q1, 2023 earnings report showed a nice rebound in ad sales along with promising future guidance leading to the companies latest surge in share prices in April.

ACPS = $98.21

The Financial Sector

Aim = 15% of my Stock holdings

13. Bitcoin ( BTC-USD ) is digital gold in my opinion and the future of finance as a potential bedfellow to or eventual replacement of not only the U.S. dollar, but to all fiat money in the coming decades. I plan on holding Bitcoin stock for the next 20+ years and to very rarely if ever sell shares, so month-to-month performance means little to me at this point. I plan on it being a long-term top 3 stock position in my portfolio at all times and will consider adding significant shares to my position if the coin drops below the $15K level. I added 100 more shares of Grayscale Bitcoin Trust ( OTC:GBTC ) stock again in August of 2022 as it continues to hover around $20k a coin. A much bigger buy of Bitcoin in October as I added an additional 700 shares as I try to build this position back up to one of my largest positions.

November brought about another Crypto winter for digital currencies with the FTX catastrophe. Short term pain for Bitcoin with long term gains as I believe Bitcoin continues to show why it is best in class in the space as other coins continue to zero out.

There have been some massive recent gains in Bitcoin prices as the Fed looks to potentially be leveling off interest rate spikes sooner than the market was forecasting due to the March 2023 banking crisis. As one of my largest positions, I hope the trend continues as Bitcoin hovers around $30,000 a coin.

ACPS = $22.84

14. Truist Financial Corporation ( TFC ) A brand new position for me to replace my HSBC. Wanted another banking stock to complement my overly large bitcoin stock position that could help balance the sector. With interest rates continuing to rise banks like Truist have good long-term upside and appear to me to be great values at this time. Its attractive dividend yield at around ~4.42% and P/E value of ~10.63 make it my choice in the banking sector at this time.

The March 2023 banking crisis means that almost all banking stocks experienced a bad month especially if you are a regional smaller bank and not a heavy weight. With the babies thrown out with the bathwater a lot of the negative price impact now has been absorbed as I think the banking crisis is mostly concluded. This means hopefully rebound potential for stocks like Truist but of course, these things can take time. Horrible month for the stock for sure though as I just added it to my portfolio the month before.

ACPS = $49.01

15. Charles Schwab Corp ( SCHW ) The chaos in March of 2023 in the banking sector with institutions like SVB Financial ( OTC:SIVBQ ) and Credit Suisse ( CS ), which will soon be swallowed by UBS Group ( UBS ), means that a lot of babies got thrown out with the bad bath water. Poor risk management and underwater bond portfolios due in part to the FED's rapid raising of interest rates means that opportunity now exists for investors in banking and financial institutions that hopefully should not be part of any systemic banking failure as the governments across the world jump in to backstop deposits and credit issues with other financial institutions.

Schwab, in my opinion, is a safe investment that got caught up in the banking chaos as an institution of interest even though it is on much surer footing than other possible crash and burn institutions like First Republic Bank ( FRC ). Schwab has shored up a lot of its issues that it might have had over the past couple of weeks with the CEO stating that it could easily endure outsized deposit outflows and is not in danger of having to sell securities at a deep discount if a deposit run did happen to occur in the coming months.

This latest drop in Schwab means that it has approximately 30% upside in the coming months as banking jitters hopefully mitigate and then evaporate across financial markets. I love my entry price with an overly large position in the name and am prepared to wait out the potential months it might take to get the potential 30% rebound I see coming. I plan on most likely selling my Schwab position when it jumps to around $65 a share.

ACPS = $48.38

The Consumer Discretionary Sector

Aim = 8% of my Stock holdings

16. Tractor Supply Company ( TSCO ) quietly continues to perform as one of the best companies in boring retail as it seems mostly immune to Amazon's ( AMZN ) dominance. Bulky fencing and bigger farm equipment is not an easy thing to sell at this time on Amazon apparently. Its acquisition of Petsense makes a lot of sense now, especially with the explosive growth of everything pet in the wake of COVID-19 shutdowns.

ACPS = $79.76

17. Tesla ( TSLA ) is a larger position again for me after selling the proceeds from my Twitter trades in the middle of 2022. It was originally not on my buy list, but Elon Musk selling ~$8.4B of Tesla stock to help fund his upcoming potential purchase of Twitter allowed the high-flying Tesla stock to trade under $800 a share pre-split at that time. After a phenomenal earnings report at that time, I was more than happy to buy back into Tesla's story as I have made great money on it in the past. Tesla's stock had a 3-1 split in August of 2022 which I see as bullish for the company long-term especially with its potential as a former meme stock. Once Musk's Twitter obsession passes along with the headlines, I wouldn't be surprised to see a surge in Tesla share price as Musk turns his attention back to his main concern.

Starting off 2023, Tesla shares have been surging as the company is cutting prices to gain market share while it continues to achieve terrific cash flow. With the Cybertruck and Semi-Truck coming potentially in 2023, plenty of catalysts out there for Tesla to showcase its dominance in the electric vehicle segment. Like Musk or hate him, his companies print gold. However, April was not a kind month for Tesla with an ~15% drop in shares. Hoping to buy some more Tesla stock when I sell my Schwab shares hopefully later in 2023.

ACPS = $255.37

The Consumer Staples Sector

Aim = 4% of my Stock holdings

18. Procter & Gamble ( PG ) is a legacy holding that sports a decent growing dividend along with many best-in-class brands like Olay, Head & Shoulders, Dawn, and Charmin. Always nice to have some stalwarts for the upcoming recessions and depressions.

ACPS = $92.59

19. PepsiCo ( PEP ) is a phenomenal drink company with brands like Pepsi-Cola, Gatorade and Tropicana, along with amazing growth in the snack category with Frito-Lay that, in my mind, sets it apart from competitors like Coca-Cola ( KO ).

ACPS = $106.77

The Industrials Sector

Aim = 4% of my Stock holdings

20. Jacobs Solutions ( J ) is a legacy holding I have loved for years. A long-time no-debt company that makes super-smart acquisitions. It now has very low-debt and initiated a small dividend which it should be able to grow annually over the coming years like it did in January of 2022 by 10% and in January of 2023 by 13%. Its focus on carbon neutrality and diversity in its workforce makes it a prime target for the younger generation. Jacobs could also experience sustained tailwinds for years due to Biden's infrastructure and spending bills.

ACPS = $68.41

21. Virgin Galactic ( SPCE ) continues to look ripe and tasty for another re-entrance at its current price. I love Virgin Galactic's volatility as I have made good money in the past buying low and selling high. Commercial space flight for Virgin Galactic looks probable in 2023, so it is a long buy-and-hold scenario but one I'm willing to wait on as a small position.

ACPS = $13.21

The Materials Sector

Aim = 1% of my Stock holdings

22. Cleveland-Cliffs ( CLF ) is a favorite material stock for me and is having a good run to start 2023. It is still making money hand-over-fist and has fixed its former debt problems means it can handle any potential upcoming recessions easily enough. I am still massively overweight in energy and oil so no big hurry to get my materials sector up to previous levels again means I see oil itself as a material. Sold a decent amount of my Cliffs stock in April of 2023 to buy a few more shares of Schwab stock as that stock dipped back down to where it was when the 2023 banking crisis happened. I plan on buying back more shares of Cliffs once I finish up with Schwab or with future inflows of cash.

ACPS = $15.76

The Energy Sector

Aim = 15% of my Stock holdings

23. Petrobras ( PBR.A ) is a dividend legend. Even with the election of leftish former President Luiz Inacio Lula da Silva back into the Presidency, Petrobras is still on track to pay a massive dividend at the end of 2022 and beginning of 2023 to investors. It appears that the new incoming regime is at least signaling that it won't take an " interventionist " stance initially against Petrobras, but will work with the company and markets over time to make desired changes to its policies. This could include changes over time to Petrobras's dividend policy to perhaps invest in additional refining. Lula's transition team also is looking to set fuel pricing policy for Brazil instead of Petrobras going forward as well.

I had a big decision to make around the last dividend ex-date on Nov. 22, 2022 on whether to keep or sell some or all of my Petrobras shares in response to the new incoming regime. After much deliberation I decided to maintain my current position for a couple of reasons. First, the new liberal regime's election win is already well reflected in the stock price going from around $16 a share when former President Jair Bolsonaro looked to have a chance to win the election to where it sits now around $10 after the latest dividend ex-date.

Even with a new regime coming in, dividends still are flowing and look to continue to flow in the future. This is the main reason I am holding shares in Petrobras in the first place. Brazil is and will continue to be Petrobras's biggest shareholder. The company pays huge amounts of its profits to the state both in the form of taxes and dividends which it uses to fund its social programs. Sure there will be changes to policies, but at the end of the day Brazil needs the dividends as much as investors.

Here's a list of current and upcoming dividends after I made Petrobras a top holding in my portfolio in May of 2022 when I bought 6,450 shares.

I bought 6,450 PBR shares back on May 6, 2022 for $87,590.36. I sold 2,450 shares of PBR on June 13, 2022 for $30,847.49. Finally I bought 1,000 shares again on July 22, 2022 for $11,580. At this point I resolved to just hold the shares for the foreseeable future and grab quarterly dividends. Here is how I have done then overall on my PBR investment since May of 2022.

ACPS= $13.18

The Utility Sector

Aim = 1% of my Stock holdings

24. Duke Energy Corporation ( DUK ) Used a decent portion of my IRA deposit for last year's 2022 tax year to boost up my Duke position for my Utilities sector. I love holding a near 3% position in Utilities which I can sell at the drop of a hat for stock opportunities instead of holding cash. Its ~4.2% yield and relative low downside compared to other stocks make it a great cash alternative for me while I wait for market deals to appear. Sold some Duke shares in March of 2023 to build an overly large Charles Schwab position. Have to raise funds somewhere and trimming utilities is always an option.

ACPS = $100.57

The Real Estate Sector

Aim = 3% of my Stock holdings

25. American Tower ( AMT ) is a premier U.S. cell phone tower company aggressively expanding globally across a few more continents. 5G evolution could be a lucrative tailwind for years to come. Can't think of a reason to add another real estate play, so I just plan to keep adding to this holding over time.

ACPS = $111.38

Bonds (2% of my Stock holdings)

This asset class is currently satisfied by my mutual fund holdings.

My top 10 Holdings and Percentage of my Portfolio

Stock Watch List:

Stocks I am looking to add to my portfolio or add shares to in the coming months: Cleveland Cliffs, Eli Lilly, Tesla, Duke, and Virgin Galactic.

Best of luck :).

For further details see:

Healthcare And Facebook Help Propel My 25 Stock ~$424K Portfolio To New Highs In April