Who Cares What the Market Does?

The wild swings in the market continued this past week, aided and abetted by both Goldman Sachs' trading glitch and the unexpected mid-session Nasdaq shutdown. It was another crazy week in the market, but for investors focused on companies and their strengths rather than Wall Street and its gyrations, it was a fine time to be invested.

When all is said and done, the noise in the system from human-caused or technical glitches is just that -- noise. Over time, a company's operational performance will dictate its market performance, even if day by day or hour by hour, glitches and machine trading rule the airwaves. For the real-money Inflation-Protected Income Growth portfolio, last week's market machinations helped the portfolio surge forward, picking up a hair over $325 since the prior week's update.

What drove those gains?
That gain pushed the portfolio's total returns to 20.3% since inception, just edging out the potential total returns on the S&P 500 tracking SPYDERs, including dividend reinvestment. By far, the biggest driver of the IPIG portfolio's performance this past week was Microsoft (NASDAQ: MSFT  ) , whose shares surged ahead on Friday on the news that longtime CEO Steve Ballmer is retiring.

That's company-specific news that moved the stock, and the IPIG portfolio was able to benefit from it, because it has owned Microsoft's shares since last December. Back then, the company's shares had been trading so cheaply that the company still looked like a reasonable value even if it could never grow again. That made it an attractive buy candidate, and the market's reaction to Ballmer's retirement suggests there may still be life and potential future growth in that technological behemoth.

Ballmer's retirement actually marks the second time in the IPIG portfolio's brief existence that what amounts to a "change of control" substantially boosted a pick's stock price. The first was when electricity generator NV Energy (NYSE: NVE  ) agreed to be acquired by Berkshire Hathaway's MidAmerican energy unit. Of course, the two stories aren't exactly the same, as Microsoft will continue to exist as an independent company, while NV Energy will soon be subsumed by Berkshire.

In other news, the other high-tech titan in the IPIG portfolio, Texas Instruments (NASDAQ: TXN  ) , also played its part in those returns. Last Monday, the company paid its most recent dividend, and the IPIG portfolio picked up $13.16 from that payment for the 47 shares it owns. That was the second payment by Texas Instruments at $0.28 per share and part of the company's continued tradition of rewarding its owners with increasing dividends on a regular basis.

Of course, not every stock in the IPIG portfolio rose on the week, with Teva Pharmaceutical (NYSE: TEVA  ) earning the dubious distinction at the fastest faller. Concern that the generic pharmaceutical powerhouse's key non-generic drug, Copaxone, is nearing the end of its patent protection is leading Wall Street analysts, including Goldman Sachs, to downgrade the stock.

While the loss of Copaxone's patent protection will hurt Teva in the short run, the company's strength has long been its generics business, which continues to do well.

All told, a solid week
Put together the gains, the losses, and the dividends, and you wind up with a portfolio that finished the week like this:

Company Name

Purchase Date

Total Investment (Including Commissions)

Current Value, Aug. 23, 2013

Current Yield, Aug. 23, 2013

United Technologies (NYSE: UTX  )

12/10/2012

$1,464.82

$1,850.40

2.1%

Teva Pharmaceutical (NYSE: TEVA  )

12/12/2012

$1,519.40

$1,455.40

3.1%

J.M. Smucker

12/13/2012

$1,483.45

$1,843.82

2.1%

Genuine Part (NYSE: GPC  )

12/21/2012

$1,476.47

$1,826.66

2.7%

Mine Safety Appliance (NYSE: MSA  )

12/21/2012

$1,504.96

$1,861.20

2.3%

Microsoft

12/26/2012

$1,499.15

$1,911.25

2.7%

Hasbro 

12/28/2012

$1,520.60

$1,982.73

3.5%

NV Energy 

12/31/2012

$1,504.72

$1,994.16

3.2%

United Parcel Service (NYSE: UPS  )

1/2/2013

$1,524.00

$1,743.40

2.9%

Walgreen (NYSE: WAG  )

1/4/2013

$1,501.80

$1,951.60

2.6%

Texas Instruments (NASDAQ: TXN  )

1/7/2013

$1,515.70

$1,836.29

2.9%

Union Pacific

1/22/2013

$805.42

$948.36

2%

CSX (NYSE: CSX  )

1/22/2013

$712.50

$862.24

2.4%

McDonald's (NYSE: MCD  )

1/24/2013

$1,499.64

$1,522.08

3.2%

Becton, Dickinson

1/31/2013

$1,518.64

$1,782.36

2%

AFLAC (NYSE: AFL  )

2/5/2013

$1,466.35

$1,615.41

2.3%

Air Products & Chemicals (NYSE: APD  )

2/11/2013

$1,510.99

$1,768.00

2.7%

Raytheon (NYSE: RTN  )

2/22/2013

$1,473.91

$2,096.55

2.8%

Emerson Electric (NYSE: EMR  )

4/3/2013

$1,548.12

$1,734.88

2.7%

Wells Fargo & Co (NYSE: WFC  )

5/30/2013

$1,525.48

$1,582.12

2.8%

Kinder Morgan

6/21/2013

$1,518.37

$1,563.66

4.3%

Cash

   

$345.09

 

Total Portfolio

   

$36,077.66

 

Data from the IPIG portfolio's brokerage account, as of Aug. 23, 2013.

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

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