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.
