Home Invest Want To Invest Like Warren Buffett? Check Out This Stock Play

Want To Invest Like Warren Buffett? Check Out This Stock Play

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Stocks made new highs Friday as Apple ( AAPL ), Boeing ( BA ) and Home Depot ( HD ) boosted the Dow and Bitcoin looked to recover Thursday’s losses.

[ibd-display-video id=3077575 width=50 float=left autostart=true] SPDR Dow Jones Industrial Average ( DIA ) led with a 0.7% gain, SPDR S&P 500 ( SPY ) advanced 0.4% and PowerShares QQQ Trust (QQQ) added 0.3%. Emerging markets also participated as iShares MSCI Emerging Markets (EEM) rose 0.6%.

Apple, up 0.9%, climbed past a 176.34 flat-base buy point it had initially taken out Dec. 18. Shares had found support at the 50-day moving average after a mild pullback. The iPhone maker’s relative strength line, however, has been flat.

Gold miners, retail and banks were among the biggest sector fund gainers in the stock market today . Real estate and utilities were among the few sectors bucking the uptrend.

Bitcoin also rose as it tries to recover from Thursday’s slump, which occurred after South Korea said it was working on a bill to ban cryptocurrency trading. Bitcoin climbed 3.5% to $13,748.50, according to CoinDesk , off slightly from an earlier high of $14,095.06. Bitcoin Investment Trust (GBTC) bounced 14%, on track to snap a four-session losing streak, after finding support near its 50-day line Thursday.

Facebook (FB), down 4%, weighed on the tech-heavy Nasdaq. The social network said Thursday it would change its News Feeds to give precedence to friend and family posts. Analysts say the move could affect Facebook’s ad revenue.

Buffett Envy?

Want to own Coca-Cola (KO), American Express (AXP) and other holdings similar to those of billionaire investor Warren Buffett?

PowerShares S&P 500 Low Volatility Portfolio (SPLV) could fit the bill. The ETF is in a potential buy range from a rebound off its 50-day moving average . It advanced 7% from an early September bounce off the line to its Dec. 4 intraday high. SPLV was featured in this ETF column , which was published Sept. 27.

The fund, which launched in May 2011, has gathered $7.5 billion in assets. It tracks the S&P 500 Low Volatility Index, which comprises the 100 least volatile S&P 500 stocks over the past 12 months. The index also has the ability to respond dynamically to market conditions. So unlike some other low volatility indexes, it can move into better-performing sectors when deemed necessary.

Financials account for the biggest sector weighting at nearly 21% of assets. Utilities make up about 20%, industrials 19%, and information technology and consumer staples roughly 10% each. The top 10 holdings as of Jan. 10 included Honeywell International (HON), Coca-Cola, Berkshire Hathaway (BRKA), PepsiCo (PEP) and Republic Services (RSG).

Berkshire Hathaway, Buffett’s holding company, owned Coca-Cola as one of its biggest positions in Q3. Other Buffett names in the ETF include American Express (AXP), U.S. Bancorp (USB), Moody’s (MCO), Procter & Gamble (PG) and Visa (V).

IBD’S TAKE:Making money catching ETF uptrends requires knowledge about how to read charts. You can learn how at IBD University .

Buffett tends to own some big dividend payers. For instance, Coca-Cola yields an annualized 3.2%, P&G offers 3.1%. SPLV’s 12-month dividend is just north of 2%, above the S&P 500’s average 1.7% payout. And it has a dividend growth rate of 7% vs. SPDR S&P 500 ( SPY )’s 12%.

SPLV is up 0.2% this year through Jan. 10, lagging the S&P 500’s 2.9% gain. Its average annual returns of 10.2% and 13.6% over the past three and five years also slightly trail the benchmark index, which returned a respective 12.7% and 15.7%.

Generally, SPLV tends to perform better if the stock market declines and low-volatility stocks fall less than growth stocks. It carries a 0.25% expense ratio.

Thursday’s pick, Robo Global Robotics & Automation (ROBO), hit a new high but remains in a buy zone from a 42.69 flat-base entry . Global X Robotics & Artificial Intelligence (BOTZ) made a similar move.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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