4 Stocks I'm Building My Retirement Portfolio Around

Today, I'm going to give some plain talk about four companies that I am building my retirement portfolio around. I'm not going to feed you a ton of stats. Those numbers are -- no doubt -- important, but they are also readily available elsewhere.

Instead, I'd like to do something I always appreciate as a reader: take you on a simple walk-through of my reasons for owning these stocks.

Though I can't promise these companies will be winners, you can rest assured that if they aren't, I will be feeling the pain right along with you. And for those who (wisely) want some context, my longtime CAPS profile says that I rank in the top 5% of investors at the Fool; that's got to count for something.

Add these companies to your Watchlist and you'll be able to stay up-to-date on all of their latest news. Read all the way to the end, and I'll give you access to a second opinion: five excellent stocks from one of the Fool's most seasoned investors.

Apple (Nasdaq: AAPL  )
If the last 10 years have taught us anything, it's that innovation always wins out. That's a double-edged sword, as competitive advantages are tough to come by, and the mighty can fall quickly from their perch on top of the mountain.

But the fact of the matter is, Apple is a company that has innovation in its DNA.

No, Steve Jobs is no longer with us; his greatness, however, is -- in the form of iPhones, iPads, and, most important, in the form of those products he helped design which the public does not yet know about (e.g., the recent rumors of a revamped Apple TV). Apple is poised for so many possible futures one could arguably assert that they will one day unseat the likes of Netflix in streaming movies or Sirius (Nasdaq: SIRI  ) in offering news, music, and sports over the airwaves.

In the interest of full disclosure, Apple now sits at 8.1% of my portfolio.

Google (Nasdaq: GOOG  )
To be honest, I think it would be difficult to argue that Google shouldn't be a part of an investor's watchlist, if not their portfolio. If Apple is a good example of a company with multiple futures, then I think Google is an even better example.

At its core, Google is a search and advertising business -- and the company has been wise to keep its focus on this throughout the years. But it has its iron in several different fires as well. Chrome, YouTube, and Android are all wildly popular and growing by the day. Google+ is trying to take social traffic from Facebook. And there's even a Google Offers program that could one day rival Groupon, Living Social, and Travelzoo (Nasdaq: TZOO  ) .

Right now, Google accounts for 7.2% of my portfolio, and I'll be looking to add more soon.

Coke (NYSE: KO  )
Coke really couldn't be more different from Google or Apple. But that's the kind of diversification that any portfolio needs to perform during the ups and downs of the market.

The bottom line with Coke is this: The brand is just about the most ubiquitous in the world. I've traveled to Asia, Europe, and South America, and in every instance, Coke was everywhere.

There'll always be competition -- sometimes from the usual suspects like PepsiCo, and other times from more interesting start-ups, like do-it-yourself soda maker SodaStream (Nasdaq: SODA  ) . But if the past is any indication of the future -- and sometimes, I believe it is -- then one thing is for sure: Coke will still be a leading brand 20 years from now.

Coke currently makes up 5.4% of my portfolio.

Zipcar (NYSE: ZIP  )
It stands to reason that my portfolio has some room for a spunky upstart. That position goes to car-sharing specialist Zipcar.

Zipcar is capitalizing on a shift that I think is already under way in many urban areas: a second-guessing about the necessity of car ownership. In much the same way the recent financial mess has made us rethink the American imperative of home ownership, many Zipsters (as they're called) have decided that the benefits of car ownership no longer outweigh the costs.

The company recently entered into an agreement with Ford (NYSE: F  ) , whereby the carmaker will be providing the vehicles for Zipcar's college campus locations. Ford believes this will engender brand loyalty when the students graduate into the real world. It will be interesting to see if they will be, instead, just further reinforcing the idea that car ownership is only for the super-wealthy.

Currently, as it's still in its early stages, Zipcar makes up only 0.5% of my portfolio, but I will likely be adding more shares in the future as the company's market opportunity becomes clearer.

A second opinion for a master investor
It just so happens that all four of these stocks are also current selections of The Motley Fool's Million Dollar Portfolio (MDP) service. That service will be opening to new members next week -- the only time it will be doing so this year.

The service is run by Ron Gross, who successfully ran his own hedge fund for nine years before starting up MDP. He has put together a special free report, "5 Stocks for the Next Bull Market," to give you a taste of what the MDP experience is all about. This report will only be available for a short time, so I encourage you to get your free copy today, before time runs out.

Fool contributor Brian Stoffel owns shares of Apple, Google, Travelzoo, Coca-Cola, SodaStream, Zipcar, and Netflix. You can follow him on Twitter at @TMFStoffel.

The Motley Fool owns shares of PepsiCo, Coca-Cola, Zipcar, Apple, Google, and Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor, SodaStream International, Google, PepsiCo, Coca-Cola, Travelzoo, Netflix, Zipcar, and Apple; creating a diagonal call position in PepsiCo; and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.


Read/Post Comments (8) | Recommend This Article (26)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 27, 2011, at 7:08 PM, midnightmoney wrote:

    so would you recommend adding zipcar to a roth ira, Brian? That's the kind of retirement account I'm currently building.

  • Report this Comment On October 28, 2011, at 12:43 AM, TMFCheesehead wrote:

    @midnight-

    I've actually already did just that...

    http://www.fool.com/investing/general/2011/08/29/im-buying-t...

    Brian Stoffel

  • Report this Comment On October 28, 2011, at 7:31 AM, dbtheonly wrote:

    Brian,

    The lack of dividends steered me away from AAPL & GOOG for retirement. Instead I have KO, MCD, & NGG as my core holdings. Comments?

  • Report this Comment On October 28, 2011, at 9:11 AM, daveandrae wrote:

    Friend-

    A few things

    1. Assuming you've invested an equal amount of capital in each business, the dividend of your portfolio is a paltry 0.685%.

    2. The combined market cap of these businesses is 726.26 billion compared to an enterprise value of 675.4 billion. Thus, taken as a whole, your portfolio is also overvalued.

    Sorry to say this, but I thought you should know.

    Good luck

  • Report this Comment On October 28, 2011, at 9:23 AM, TMFCheesehead wrote:

    @dbtheonly-

    All solid dividend stocks. Being an investor is about knowing what you want. If you're after dividend stocks, you've got some good ones there.

    @daveandrae-

    Fair enough. I guess time will tell if these guys are overvalued.

    Brian Stoffel

  • Report this Comment On October 28, 2011, at 10:24 AM, Eerkes wrote:

    I like the tailwind behind zip and definitely buy into the idea, it just feels like they would perpetually be in a pinched position from both sides. However, Ford's eagerness makes me think twice.

  • Report this Comment On October 28, 2011, at 10:59 AM, dbtheonly wrote:

    Mr. Stoffel,

    Thank you for your response.

    I guess what I'm asking is; you have chosen excellent non-dividend growth stocks for your retirement & I have chosen solid dividend payers. I did so figuring that if my stocks are throwing off 4-5% yearly in dividends; it's that much less I have to withdraw each year. I still have an income.

    I also keep my "Take a Shot" stocks out of my retirement plans. If they hit, great; if they flop, okay. Is Zip a shot or is it a more core holding? At 1/200th of the total, it's hard to call it core.

    You've gone the other route. Am I missing something?

  • Report this Comment On October 28, 2011, at 11:08 AM, brewersfan81 wrote:

    @db-

    At this point, you're right, it's more of a "shot", but I'm definitely open to the possibility that it could grow into a core, and am looking to make it a larger part of my overall portfolio.

    Brian Stoffel

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