The stock markets are in a mature bull phase, and I was thinking about how to improve our portfolio to adapt to this situation. I don't know when will come the next bear market, and I think that nobody can predict it. Because of it I can only do what I have influence on: change our portfolio to fit for an unpredictable future.
There are a lot of good shares, what we can buy at a reasonable price, but we try to choose those, that are working in non-cyclical industries. If I see two good opportunities I will choose for our portfolio the one that works in non-cyclical industry. The non-cyclical companies will perform better in the next economic recession, and we will have more reliable dividend income from them.
Because we have large positions in cyclical shares like Royal Dutch Shell (RDS.A), BHP Billiton and BMW we had to build sizable positions in non-cyclical companies. In June we bought the shares of Walgreens Boots Alliance (WBA) and CardinalHealth (CAH) companies. Now WBA is our second largest position. The shares of BHP Billiton and Royal Dutch Shell (which is our largest position) were bought during the oil price downturn in 2015-2016.
To streighten our portfolio we can buy consumer staples, what would be really great, but I think that the threat of Amazon created a good opportunity to buy healthcare related shares and they provide better valuation than the most consumer staples.
WBA and CAH are the members of David Fish's list. Cardinal Health increased it's dividend in the last 21 years and WBA is a dividend aristocrat, which increased it's dividend in the last 42 years. I believe, that both of them will be good investment for the next decades.
Disclosure: We have Royal Dutch Shell, BHP Billiton, BMW, Walgreens Boots Alliance and Cardinal Health shares.