Stock Pairs Portfolio

Diversifying your stock portfolio is a prudent approach to long-term investing. Owning too few stocks sets up the possibility of a financial meltdown if one or more stocks goes down for a long time.

One easy way to diversify your portfolio is to select two like stocks from the same industry. Hopefully, the chances of two similar companies going bad is less than one stock going bad. The pairs approach is a simple way to guard against a one-stock disaster. Of course if the entire industry goes out of favor, then both stocks will probably suffer.

Here are a five stock pairs of well-known companies.

Stock Pairs
Pair	Industry
Deere (DE) and Caterpillar (CAT)	Heavy Equipment
Coca-Cola (KO) and Pepsico (PEP)	Food and Beverage
Colgate-Palmolive (CL) and Proctor & Gamble (PG)	Consumer Goods
IBM (IBM) and Intel (INTC)	Computers
Ameren (AEE) and Southern Company (SO)	Electric Utilities

To follow the day-to-day progress of the pairs portfolio, check out the chart below. It is updated each day, so the portfolio values are always current. The current value of the portfolio assumes that $1,000 was invested (total of $10,000) in each of the 10 stocks at its closing weekly price for the first week of January 2001.

Click chart to enlarge it.

To see a chart of current and past dividends for these stocks, use the buyupside.com Dividend Chart Maker.

To get more performance information about these stocks, use the buyupside.com Stock Return Calculator.

See Daily Portfolio Updates On buyupside.com - Annual Dividend and Dividend Yield Included for more stock portfolios.

Updated Mar-18-10.