Getting Back to the Basics to Ensure Your Portfolio Withstands Whatever Comes Next

Physical balance isn’t my strong suit. But I’m not too worried about that.

When it comes to my personal portfolio, however, I’ve realized I need some balance. But that was only after watching some of my holdings slide all the way down to zero.

It’s hard for me to follow news about the markets and technology and not get swept up in the hype. I love reading about the newest technology to debut and the latest patent filed.

They might not have yielded profits for their parent companies yet, but that means I’m getting in on the ground floor. Maybe I’ll make a few hundred percent on my money.

Many people saw just such an opportunity last March when markets tanked. They jumped on the investing bandwagon. Many made profits, especially in the technology sector.

But markets won’t continue to go up forever … and diversifying — or balancing — your portfolio appropriately can help make sure you are set no matter what happens in the market.

I’m not saying that you shouldn’t be willing to take a chance on investing in a smaller company or a new technology.

But I’m a huge advocate of having a portion of your portfolio dedicated to solid investments. I’m talking about companies that will continue to make a profit no matter what’s going on in the economy.

One of my absolute favorite places to look for these bedrock stocks is the household and personal products category. So, I headed over to the stock screener on weissratings.com to see which stocks in the industry were top rated.

First up, we’ve got Church & Dwight Co., Inc. (NYSE: CHD). I know I’ve written to you about this company before. It’s the parent company of a number of brands you probably have sitting in your house right now, including Arm & Hammer, Orajel, Vitafusion, Waterpik and OxiClean, just to name a few.

The company reported its most recent earnings at the end of January. For the full year of 2020, net sales grew 13.2%. The company also announced a 5.2% dividend increase. Church & Dwight has paid a regular consecutive dividend for 120 years.

This really says something about the stability of the company. It has had the money to reward its shareholders for all that time, and sales are still increasing.

Actual share prices are up 10% over the past year and the dividend yield is up around 1.15%. Plus, it still has a solid “Buy” rating.

Next up, we’ve got Medifast, Inc. (NYSE: MED). You’ve probably heard about Medifast or OPTAVIA even if you’ve never tried weight loss tactics. That’s especially true now since the company sells products using a multilevel marketing structure.

I’m not going to get into the validity of the products or the validity of the sale tactics. I’m just here to look at the numbers.

At the end of last year, the company conducted a consumer study of 1,414 adults and found three out of five are looking to prioritize healthy eating habits over work/life balance in 2021. And 74% of the respondents reported that they need support to maintain healthy eating habits.

No matter what your personal opinion is, it’s clear there is a demand for Medifast’s products. In the company’s last earnings release in November, it reported that revenue increased 42% compared to the same quarter in 2019. On top of that, Medifast’s February dividend was the 20th consecutive dividend paid to shareholders.

Shares are up a whopping 169% over the past year and the current dividend yield is 1.63%. Not surprisingly, the company still has a solid “Buy” rating.  

Last, but not least, is The Clorox Co. (NYSE: CLX). A true household name and a company whose products will always be in demand. On top of the Clorox brand, it’s also the parent company of Brita, Pine-Sol, Burt’s Bees, Hidden Valley and many other familiar names.

In its last earnings release, the company reported sales growth of 27%, which was driven by double-digit sales growth in almost all business segments. Plus, the company just announced its next dividend payment. Clorox has paid a dividend for the past 52 years.

Again, that’s a sign of a company with healthy cash control.

Shares are up 10% over the past year and the current dividend yield is around 2.3%. The company is still rated a “Buy” since profits for Clorox aren’t slowing down any time soon.

Everyone has a different risk tolerance, and any decent financial advisor could help you come up with a better idea of how much money you should have in different categories.

But having a balance between solid, steady investments and hot-shot opportunities is important for the health of your portfolio.  

Plus, most of those bedrock stocks pay dividends that increase every year. In my TD Ameritrade account, it’s super easy to click a box and have those dividends reinvested automatically ... meaning the power of compounding kicks in and my money works harder with no extra effort from me.

Then I have more time to do my due diligence on the riskier companies I want to hold as well.

It’s a win/win … just like using the Weiss Ratings to help keep your portfolio ready to withstand whatever comes next.

Best,

Kelly