DOLL: BIG BUSINESS

July 24, 2015

How expensive are large company U.S. stocks, the cornerstone of just about everyone’s retirement portfolio? Nuveen’s widely followed Chief Equity Strategist and large cap mutual funds manager, Robert Doll says there are high quality, dividend paying businesses worth owning for long-term value and income.

WEALTHTRACK Episode #1205; Originally Broadcast on July 24, 2015
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ROBERT DOLL

Consuelo Mack

Two of  WEALTHTRACK’s most enduring investment themes in the decade since our launch have been the power of compounding and the wisdom of diversification.

The results over time of compounding, reinvesting dividends, capital gains and interest has been described as the most powerful force in the universe.   

For instance, $10,000 invested over the last ten years in the S&P 500, without reinvesting dividends and capital gains, would be worth $17,318 today. That’s an annualized return of nearly 6% and a cumulative return of 73%. 

If you had taken that same $10,000 portfolio and reinvested the dividends and capital gains instead, you would have more than doubled your initial investment and have a   portfolio worth $21,377, equal to annualized returns of nearly 8% and a cumulative gain of 114%!

As far as diversification goes, the reality is that most investors do not own many different asset classes. Plus, in their stock portfolios, they tend to hold hefty chunks of large cap U.S. stocks.

It turns out that was not a bad position to be in over the last decade, especially during the now six year old bull market when U.S. stocks have outperformed many international ones. 

As I just explained, $10,000 invested in just the S&P 500, with dividends and capital gains reinvested, would have more than doubled your money. That same $10,000 equally divided among the S&P 500, U.S. small cap and mid cap stocks, foreign developed country stocks and emerging market stocks would have netted you only about $500 more.

In retrospect, for this decade at least, diversifying by size and geography hardly seemed worth the trouble. Will it be going forward? What is the outlook for those large cap U.S. stocks that dominate so many of our portfolios?

This week’s guest is Bob Doll, who has focused on that popular category for more than three decades, and has been a regular WEALTHTRACK guest since the very beginning.  Doll is Chief Equity Strategist and Senior Portfolio Manager at Nuveen Asset Management, where he manages the firm’s large cap equity series. His responsibilities include running nine mutual funds: the traditional Large Cap Value, Growth and Core funds, three large cap specialty funds: Nuveen Core Dividend, Nuveen Concentrated Core and Nuveen Growth and three alternative funds: Nuveen Core Plus, Nuveen Equity Long/Short and Nuveen Equity Market Neutral funds.

Doll also writes widely followed weekly commentaries and makes 10 annual predictions, for which he recently did his mid-year review.

His take on the large cap universe is that it offers much more diversity than meets the eye. He will tell us about the differentiators that can significantly influence performance.   

If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now.  We also have an EXTRA interview with Doll, available exclusively on our website.

Plus, WEALTHTRACK is now available on a YouTube Channel.  So if you are unable to join us for the show on television, you can watch it on our website, WealthTrack.com, or by subscribing to our YouTube Channel.

Have a great weekend and make the week ahead a profitable and a productive one.

Best Regards,

Consuelo

Mathews Asia

MAKE SURE YOUR STOCK PORTFOLIO IS DIVERSIFIED INTERNATIONALLY

  • U.S. Stocks have led bull market
  • Take some profits
  • Reallocate to international stock markets
  • True diversification means some “uncomfortable” investments
  • European & emerging market stocks
  • Include foreign small cap stocks
No Bookshelf titles this week.

FREE CASH FLOW & DIVIDEND GROWING COMPANIES

Criteria:

  • Free cash flow rate of 8% vs. 4% for S&P 500
  • Record of increasing dividends
  • Low payout ratios

Cardinal Health Inc (CAH)

CAH Chart

CAH data by YCharts

Gilead Sciences Inc (GILD)

GILD Chart

GILD data by YCharts

UnitedHealth Group Inc (UNH)

UNH Chart

UNH data by YCharts

Apple Inc (AAPL)

AAPL Chart

AAPL data by YCharts

Boeing Co (BA)

BA Chart

BA data by YCharts

Western Digital Corp (WDC)

WDC Chart

WDC data by YCharts

Macy’s Inc. (M)

M Chart

M data by YCharts

Target Corp (TGT)

TGT Chart

TGT data by YCharts

Delta Air Lines Inc (DAL)

DAL Chart

DAL data by YCharts

Apple Inc (AAPL)

AAPL Chart

AAPL data by YCharts

UnitedHealth Group Inc (UNH)

UNH Chart

UNH data by YCharts

PREMIUM subscribers have access to this transcript here.

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ROBERT DOLL: MARKET ORACLE

wt1104_Doll_nameThis week’s WEALTHTRACK guest has made a name for himself with his annual predictions and with his proven investment skill. Bob Doll, Chief Equity Strategist and Senior Portfolio Manager at Nuveen Asset Management, has run several large cap stock mutual funds for three decades. We’ll get a personal take on his mid-year predictions for investment opportunities, and traps to avoid.

WATCH NOW…

BOB DOLL: BULLISH ON STOCKS

DOLL_NameBob Doll is a widely followed strategist and portfolio manager, an unusual combination at major Wall Street firms, who has excelled in both disciplines. We began the interview by asking Bob to step way back from the noise of the day and share his longer term views of where we are and where we are heading. My first question was why, after the worst decade since the 1930’s, he is predicting that stock returns in this decade will be in the high single digits.

WATCH NOW…

ED HYMAN AND BOB DOLL

An exclusive interview with Wall Street’s long time number one economist Ed Hyman and Great Investor Bob Doll. What they expect in the economy and markets in 2012 and strategies to prosper in it. WATCH NOW…

BOB DOLL, JOHN MONTGOMERY AND TOM PETRIE

wt515thumbThree outstanding financial world figures: Bob Doll runs three large cap funds at BlackRock; John Montgomery heads up a family of funds using computer models at Bridgeway Capital; Tom Petrie, Vice Chairman of Bank of America – Merrill Lynch, is a veteran observer of the energy sector

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Additional appearances by Robert Doll from the WEALTHTRACK archives:

SPIRITUAL GIVING

Nuveen Asset Management’s high profile Chief Equity Strategist and Senior Portfolio Manager Robert Doll has always been known for his prodigious energy and productivity. Where does he direct it in his personal life when he is not investing?


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