When investing, simpler is often better. Not always. But often.
Today I will share with you my super simple idea. I created this screen over a year ago and just forgot about it. As I was looking over some older models I noticed that the out-of-sample performance of this basic concept was still strong. It has out-performed the market more than 15% in the past 12 months and with much less volatility.
What is my simple system? Two rules.
- Dividend Yield greater than 3%
- Short interest as percentage of outstanding shares must be 1.5% or less
That’s it. You have a portfolio of S&P 500 stocks that meet these 2 simple criteria.
This is a chart that updates every 4 weeks and holds any S&P 500 stock that is applicable. The average number of stocks in this portfolio is 35.
The portfolio will hold well-known names like Coca-Cola, AT&T, McDonald’s and General Electric. The beauty of this portfolio strategy is that you continue to hold and collect dividends even during portfolio draw-downs like in 2007 – 2008. You can access this very simple yet effective screen by signing up with Portfolio123.
Full disclosure, I do get a small commission if you continue to use Portfolio123 after the free trial, but only if you use the above link. That little bit of coffee money is what keeps me motivated to keep writing about my best investing ideas – so it’s a win-win. Also, you get 30 days to trial Portfolio123 instead of 15. And I would never recommend software I don’t use and love.
Here is the S&P 500 dividend and low short interest stock screen. Happy investing.