After some nice gains since the previous week's snapshot, the real-money Inflation-Protected Income Growth portfolio closed on Friday with a slightly better than 20.7% return since its inception. Given that the portfolio launched less than eight months ago, that sort of return would ordinarily be cause for an incredible celebration.

In this market, however, it's just about average. The portfolio's returns are sitting somewhere between the rise in the S&P 500 index over that same time period and what might have been possible by buying a fund that tracks that index and reinvesting dividends.

Will the good times last?
Of course, during a rising market like the one we've been having, it's pretty easy to stay invested. After all, when darn near everything is moving up, you don't have to be a genius to participate in the gains. The real question is around what happens when the market drops. As master investor Warren Buffett has said: "Only when the tide goes out do you discover who has been swimming naked." 

The companies in the IPIG portfolio were selected based on their dividend history and prospects, their solid balance sheets, their reasonable valuations, and their fit with reasonable diversification. If the market tanks, those fundamental factors should still hold pretty well true, even if their shares fall with the market just as they've risen with it.

Just as the IPIG portfolio hasn't outperformed the market on the way up, it may not hold up any better than the general market on the way down, either. But because each pick was chosen based on those solid fundamentals at the time of purchase, it will be possible to evaluate each selection on those same measures when the market falls. If nothing else, that should help shed light on which companies have been swimming naked, to make buy more/hold/sell decisions more straightforward.

Make hay while the sun shines
For instance, the biggest gainer in the IPIG portfolio this past week was Air Products and Chemicals (NYSE:APD). The company reported so-so earnings but nevertheless leaped skyward after adopting a poison pill on rumors that it may be a target of activist investor Bill Ackman. While the gain is nice, the drivers are dubious, and it suggests a healthy dose of skepticism is warranted.

On the flip side, Texas Instruments (NASDAQ:TXN) was the second largest gainer for the IPIG portfolio on the week. While it reported somewhat weaker-than-expected earnings, its shares rose on the news that its product mix is shifting toward higher-margin items, a potential harbinger of strength for the future. When it comes to drivers of a stock's strength, expanding margins are a far stronger reason for optimism than poison pills and rumors of activist investors.

The third biggest gainer for the IPIG portfolio last week was safety-equipment purveyor Mine Safety Appliances (NYSE:MSA), which also rose on its earnings news. Mine Safety Appliances' numbers were pretty strong, once you backed out the impact of currency fluctuations and a divestiture, and the market rewarded the company for those results. Solid results like that are also a decent reason for a company's stock to rise, but of course, what the company delivers in the future will drive where its stock goes next.

The news isn't always good
Of course, not every stock gained, and the biggest loss in the IPIG portfolio for the week goes to the two-stock railroad combo of CSX (NASDAQ:CSX) and Union Pacific (NYSE:UNP). Both reported solid earnings that propelled their shares to gains for the prior week's IPIG review. Still, lousy earnings numbers this week from a competitor on weak coal shipments served as a reminder of how dependent railroads are on that single commodity. That news was enough to drive the IPIG's railroads down on the week.

Put the good together with the bad, and the IPIG portfolio finished the week up by $389.79 to close the week with a better than 20% return since its inception to wind up like this:

Company Name

Purchase Date

No. of Shares

Total Investment (Including Commissions)

Current Value, July 26, 2013

United Technologies

12/10/2012

18

$1,464.82

$1,889.46

Teva Pharmaceutical

12/12/2012

38

$1,519.40

$1,547.74

J.M. Smucker

12/13/2012

17

$1,483.45

$1,896.18

Genuine Parts

12/21/2012

23

$1,476.47

$1,888.30

Mine Safety Appliances

12/21/2012

36

$1,504.96

$1,936.44

Microsoft

12/26/2012

55

$1,499.15

$1,739.10

Hasbro

12/28/2012

43

$1,520.60

$2,024.44

NV Energy

12/31/2012

84

$1,504.72

$1,983.24

United Parcel Service

1/2/2013

20

$1,524.00

$1,739.80

Walgreen 

1/4/2013

40

$1,501.80

$2,032.80

Texas Instruments

1/7/2013

47

$1,515.70

$1,838.17

Union Pacific

1/22/2013

6

$805.42

$956.40

CSX

1/22/2013

34

$712.50

$839.12

McDonald's

1/24/2013

16

$1,499.64

$1,568.48

Becton, Dickinson 

1/31/2013

18

$1,518.64

$1,858.50

Aflac

2/5/2013

27

$1,466.35

$1,649.43

Air Products & Chemicals

2/11/2013

17

$1,510.99

$1,770.04

Raytheon

2/22/2013

27

$1,473.91

$1,890.27

Emerson Electric

4/3/2013

28

$1,548.12

$1,674.40

Wells Fargo

5/30/2013

37

$1,525.48

$1,609.87

Kinder Morgan

6/21/2013

42

$1,518.37

$1,625.82

Cash

     

$271.01

Total Portfolio

     

$36,229.01

Data from the iPIG portfolio's brokerage account, as of July 26, 2013.

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Chuck Saletta owns shares of Aflac; Texas Instruments; Microsoft; McDonald's; Genuine Parts; United Technologies; Wells Fargo; Teva Pharmaceutical; Emerson Electric; Becton, Dickinson; Walgreen; Union Pacific; Hasbro; UPS; CSX; J.M. Smucker; Air Products & Chemicals; Mine Safety Appliances; NV Energy; Raytheon; and Kinder Morgan.

The Motley Fool recommends Aflac; Becton, Dickinson; Emerson Electric; Hasbro; Kinder Morgan; McDonald's; Mine Safety Appliances; UPS; and Wells Fargo and owns shares of Hasbro, Kinder Morgan, McDonald's, Microsoft, Raytheon, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.