I wanted to think aloud with you all regarding my core portfolio changes coming up at year's end.
Each year I add one new stock to my "core portfolio" to keep the ratio of stocks in my core portfolio the same as my age -- 35.
The purpose of these 35 core holdings is to group my favorite current stocks together, making them easy to add to with dollar-cost averaging.
I also allow myself the opportunity to turn over 10% of that core portfolio, meaning I'll switch four stocks out for new ones next year.
However, while these stocks will be removed as core holdings, they will not be sold -- just not actively added to like the rest of the portfolio.
Here was the portfolio before that change:
Conversely, I am almost sure to add $DOCS
to replace Teladoc and Roblox.
That leaves two more stocks to drop and three more to add.
Here's a list of my other candidates to add with a few words on why they're interesting:
- $WINA - Franchiser of resale retail brands Music Go Round, Once Upon a Child, Plato's Closet, Play It Again Sports, and Style Encore. Total return of 500%+ over the last ten years and massively profitable.
- $MEDP/$ZTS - Medpace would act as a picks-and-shovels play to the smaller side of the biotech industry. Zoetis dominates pet and livestock healthcare medicine. ROICs of 57% and 18%, respectively.
- $ULTA - Average ROIC well above 20% for the last decade and is the biggest player in its beauty niche. It would bring some consumer exposure I need, much like Winmark.
- $LII/$MUSA - Buyback wizards, with Lennox's shares down 28% in the last decade and Murphy USA's down 54% in the same time. ROICs of 40% and 23%. Wildly boring HVAC/refrigeration and gas station industries, but top-tier operators. $AZO/$ORLY could also go here.
- $WM/$HSY - Pure stability plays against a bear market. I don't have much like this in my core portfolio yet.
Of course, this is an incomplete watchlist, but I wanted to put it in writing all the same.
I would love to hear what you would choose from these or if you have a stock that may be a better idea.
Thanks as always for reading. 🙏