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A Solid Coronavirus Investment Portfolio To Cash In On The Stock Market Slump.

The stock market has been on collision course in recent weeks due mainly to the global spread of coronavirus (COVID-19). Accordingly, we aligned our portfolio to help us weather this extreme period of volatility.

Investors have witnessed steep stock market declines--drops not seen since the 2008 financial crisis, amid the global spread of coronavirus (COVID-19). So far, all stock market indices are trading in negative territory. The coronavirus global pandemic, declared as such by the World Health Organization on 03/11/2020, is forcing investors to find ways to capitalize on this period of extreme volatility. Investing steps include, but are not limited to 1) portfolio rebalancing; 2) buying more securities at rock-bottom prices; 3) selling equities to prevent further losses; 4) maintaining current investment allocation. On our end, we made a few investment modifications. We maintained our diversified growth portfolio (large, small, mid-cap funds) and added a few individual stocks for income. We target both: ultra-growth & income in the form of dividends, as we show below.


[Related: 3 Premium High-dividend REIT Stocks We're Putting in our Coronvirus Basket.]

Coronavirus Growth Portfolio

Security Type ​Expense Ratio (%) ​​Allocation (%) ​Dividend Yield (%)
​Large Cap Gr. ETF​​0.0845​1.09
​​Mid Cap Ind. Fund​0.0515​1.55
​​Small Cap Gr. Ind. Fund​​0.054​N/A (new fund)
​​International ETF​​0.0710​3.75
​​Dividend ETF​​0.46210.2
​​Growth Stock​​N/A8​1.27
​​Value Stock​​N/A26.25
​​Value Stock​​N/A2​5.54
​​Utilities Stock​​N/A2​3.80

Table 1. Growth Portfolio: Index Funds & Stocks. This portion of our coronavirus portfolio maintains a traditional diversified portfolio (large, mid, small cap funds), while also incorporating a few value stocks that also pay dividends. This occupies 90% of our portfolio.

Growth Portfolio. Image source: Pixabay

​This portfolio aligns very well with our risk tolerance. It is heavy towards growth, with our large-cap fund occupying a significant portion of this portfolio (45%). We continue to remain bullish on our large growth ETF, which has produced a pre-coronavirus return of nearly 25%. We have no intention of trimming this allocation. Although the main idea of this portion of the portfolio is ultra-growth, it is not hard to spot some amount of income. Three of our 4 individual stocks and our dividend ETF have yields that exceed that of the S&P 500's average yield of approximately 2%.


[Recommended: Not comfortable setting up your portfolio during this slump? Hire a financial advisor!]

Coronavirus Income Portfolio

Security Type ​Expense Ratio (%) ​​Allocation (%) ​Dividend Yield (%)
REIT-Mortgage N/A2 11.73
REIT-Industrial N/A2 8.04
REIT- Healthcare Facilities N/A2 5.8
REIT-Residential N/A2 5.75
REIT-Retail N/A2 8

Table 2. Income Portfolio: Real Estate Investment Trusts (REITs) Stocks. This portion of our coronavirus portfolio is built for income, using real estate investment trusts (REITs). REITs occupy 10% of our portfolio.

Income Portfolio. Image source: Pixabay

Real estate investment trusts (REITs) are required to distribute at least 90% of their taxable income to shareholders via dividends. Therefore, we selected a few high-quality small-cap REITs with a track record of paying dividends to obtain guaranteed income. We decided not to invest in bonds. Here's why.


[Related: 3 High-Yield Dividend Stocks for the Poor & Cheap Investor]

The bottom line

The coronavirus global pandemic is testing investor patience. Making changes to your investment portfolio to fit your risk tolerance and investment objectives may be necessary changes you can implement to weather this period of extreme volatility. We believe our coronavirus portfolio is well-positioned to withstand this pandemic or any future stock market headwinds. Subscribe below to obtain the names of all the funds and stocks that comprise our coronavirus investment portfolio.


[Related3 Simple Tips to Help the Rookie Investor Weather Stock Market Volatility]


Disclosure: This article contains an affiliate link to an investment product. We may receive a commission through this link when you join the partner. Our full disclaimer.

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Sunday, 12 July 2020

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