Winning In 2016: A 5%+ Dividend Yield Portfolio - Outlook, Performance And Trades For February 2016

Review and Outlook
February 2016 began with the same panic that characterized January as the first 2 weeks of the month saw a bull market only in doom and gloom predictions. However, opportunities to pick up bargains for steel willed investors existed and, by the close of the month, the markets had largely stabilized as the S&P 500 finished a few tenths of a percentage below even. My performance largely mirrored this result with a decline of -0.5% (despite a brutal month for the healthcare REITs that I have been partial to). For 2016, I am still beating the S&P 500 by 200 basis points, but a -3% to -5% 'victory' is hardly worth bragging about. I get the feeling that 2016 will be a year that almost all of my returns will come in the form of my 5%+ dividend yields and very little capital gains will be created once all the dust settles.
Overall, it's been a tough period for value investors over the last few years. Traditional value investment sectors (like energy) have been shown weakness (or been outright decimated) while growth stocks (like the 'FANG' stocks) have ridden high. As is often cited, during 2015 the average return of the FANGs was 83% vs. the S&P 500 return of only 1.4% (with most value indexes posting negative returns). However, that tide may have begun to turn in 2016 as value has begun to reassert its historical dominance over growth.
Tale of the Tape - FANG Edition (source)

Looking at a broader historical context also... Read more