An Island of Sanity in a Volatile Market

As the market zigzagged over the past couple of weeks, the real-money Inflation-Protected Income Growth portfolio just kept humming along, collecting dividends and buying shares. Since the last general update near the end of March, the portfolio is up a couple hundred dollars, which isn't bad given the near-daily whipsaw it feels like we've been riding recently.

The secret to the portfolio's success isn't much of a secret at all. Instead, it's a time-tested approach to investing inspired by Benjamin Graham, the father of value investing and the man who taught investing to Warren Buffett. By combining the benefits of dividends, valuation, and diversification into one single vehicle, the iPIG portfolio is designed to let the companies behind the stocks, not the market's daily fluctuations, drive the investment returns.

So what did happen?
While the overall message was one of relative calm, the market's machinations did provide the iPIG portfolio the opportunity to pick up shares of Emerson Electric (NYSE: EMR  ) . As a company with over 55 years of consistently rising dividend payments, it's a natural fit for a portfolio that seeks to invest in an increasing income stream. Yet until the market was so kind as to knock down Emerson's price to a more reasonable level, it was simply too pricy to justify buying.

Additionally, Becton, Dickinson (NYSE: BDX  ) made good on its dividend pledge, handing the iPIG portfolio $8.91 for the 18 shares it holds ($0.495 per share). That was the second consecutive dividend by Becton, Dickinson at that level. Should the medical device titan follow recent trends, I anticipate that it could increase its dividend near the end of the year for its December payment.

Not to be outdone, Genuine Parts (NYSE: GPC  ) also continued its long streak of paying and increasing dividends. The iPIG portfolio picked up $12.36 for its 23 shares ($0.5375 per share). That was Genuine Parts' first dividend payment at its new higher rate, and like Emerson Electric, Genuine Parts can celebrate more than 55 consecutive years of increasing dividends.

Finally, Union Pacific (NYSE: UNP  ) kept moving money into the iPIG portfolio's pocket, handing the portfolio $4.14 for the six shares it holds ($0.69 per share). As with Becton, Dickinson, that was Union Pacific's second dividend at its current level. Should that railroad giant keep with its pattern, it'd be on track to raise its dividend near the end of the year, as well.

And what comes next?
None of the companies in the iPIG portfolio are expected to pay dividends in the next week or so, but the portfolio still has a touch more than $3,000 in cash that it can deploy. About half of that is in a limit order waiting to see if the market will offer another opportunity to buy the stock that might get away. The other half? It's available if the market offers up another compelling opportunity like it did last week with Emerson Electric.

To follow the iPIG portfolio as buy and sell decisions are made, watch my article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, simply click here.

Dividends matter
If you like the ballast provided by owning companies that directly pay you for the risks you take by investing, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here.

iPIG Portfolio Snapshot as of April 5, 2013

Company

Purchase Date

No. of Shares

Total Investment (including commissions)

Value as of April 5, 2013

United Technologies

12/10/2012

18

$1,464.82

$1,667.52

Teva Pharmaceutical

12/12/2012

38

$1,519.40

$1,490.36

J.M. Smucker

12/13/2012

17

$1,483.45

$1,668.04

Genuine Parts

12/21/2012

23

$1,476.47

$1,772.38

Mine Safety Appliances

12/21/2012

36

$1,504.96

$1,762.56

Microsoft 

12/26/2012

55

$1,499.15

$1,578.50

Hasbro 

12/28/2012

43

$1,520.60

$1,863.19

NV Energy

12/31/2012

84

$1,504.72

$1,758.96

United Parcel Service

1/2/2013

20

$1,524.00

$1,670.80

Walgreen

1/4/2013

40

$1,501.80

$1,880.40

Texas Instruments

1/7/2013

47

$1,515.70

$1,607.40

Union Pacific

1/22/2013

6

$805.42

$831.24

CSX 

1/22/2013

34

$712.50

$810.56

McDonald's

1/24/2013

16

$1,499.64

$1,622.72

Becton, Dickinson

1/31/2013

18

$1,518.64

$1,729.98

AFLAC

2/5/2013

27

$1,466.35

$1,336.23

Air Products & Chemicals

2/11/2013

17

$1,510.99

$1,447.21

Raytheon Company

2/22/2013

27

$1,473.91

$1,570.86

Emerson Electric

4/3/2013

28

$1,548.12

$1,560.44

Cash

     

$3,102.28

Total Portfolio Value

 

 

 

$32,731.63

Data from the iPIG Portfolio's brokerage account, as of April 5, 2013.


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Related Tickers

8/29/2014 4:01 PM
BDX $117.17 Up +0.69 +0.59%
Becton Dickinson CAPS Rating: *****
EMR $64.02 Down -0.24 -0.37%
Emerson Electric CAPS Rating: *****
GPC $87.74 Up +0.29 +0.33%
Genuine Parts Comp… CAPS Rating: ****
UNP $105.27 Up +0.23 +0.22%
Union Pacific Corp CAPS Rating: *****

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