Am I A Dope For Holding Coke?
I have been a long-term holder of Coca-Cola (KO) since March of 2010, and it has served its purpose in my portfolio. With the initial need of a low beta, high quality dividend grower. Coke has protected my portfolio and has offset the frightening declines of riskier holdings on those nasty days of red. I am currently in the black nearly 38% not including the DRIP - a reasonable result from this foundation like core holding. However, over the past six months, Coke and its non-alcoholic beverage peers - Pepsico Inc. (PEP), Dr Pepper Snapple Group Inc. (DPS) and Monster Beverage Corp. (MNST) - have lagged the SPDR S&P 500 ETF (SPY).
Looking back even further over both the past year and 2 years, KO has lagged the SPY by 5%. Because of Coke's relative under-performance by comparison, I honestly find myself fighting the urge to sell this core holding and move on to a "better" performing position. During these itchy moments I weigh the good vs. the bad in KO stock. But more so, I find I am weighing my own responsibility as an investor. So far, the patient side of me has prevailed, and I have not sold a share. The realization that Coke is the best of breed in the sector, with very strong brand value and solid dividend history, reminds me that KO is meant to be a more steady, slower moving cog in the total "clock" which is my portfolio as a whole. In addition, my 3.74% yield on investment and 15% renewed tax rate is a great reason to hold for now.
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