The Opportunity To Build An Energy Portfolio Is Right Now

One of the blessings that comes with the territory of investing in individual companies rather than a widespread basket of stocks like the S&P 500 is that you get to allocate your money to specific companies that are either growing faster than the S&P 500 or selling at a substantial discount to the typical stock in the S&P 500. It’s a style of investing that lets you personally find intelligent places to put your money even when “the average stock” in corporate America does not offer you an attractive entry price.

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Why Not Put Your Money Into Index Funds?

Interesting question came my way from reader Scott:

….But Tim, wouldn’t most investors be better off simply owning index funds instead of trying to pick successful companies themselves?

Scott, I like that question because it cuts to the premise of the site—I write articles for everyday investors, and it is fair to wonder whether it’s all a waste of time and whether low-cost index funds should be pursued.

First of all, I’d like to start by observing the great overlap that exists between the two strategies. If you look at an S&P 500 Index Fund, what are going to be some of the large holdings? ExxonMobil, General Electric, Procter & Gamble, and Johnson & Johnson.

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Fayez Sarofim Knows How To Create A Conservative, High-Growth Portfolio

About this time last year, I talked about Fayez Sarofim for the first time when I referenced his extensive art collection and some of the very interesting personal life that has marked his eight decades in the United States. I was recently reviewing his ten largest holdings registered to Fayez Sarofim & Co., and I am very impressed by the quality and growth characteristics of the portfolio that he has put together.

When I study how he has made his money, it’s one of the best things I’ve ever seen, and that is not praise I give out lightly. This is how he allocates his fund money: 5.9% to Philip Morris International, 5.3% to Apple, 4.6% to ExxonMobil, 4.3% to Coca-Cola, 3.7% to Chevron, 2.9% to Nestle, 2.8% to Johnson & Johnson, 2.8% to McDonald’s, 2.6% to ConocoPhillips, and 2.6% to IBM.

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