Anchor Positions

We thought just for an instant
We could see the future
We thought we once knew
What really was important
--Til Tuesday

As a long-term investor, I like to build my stock portfolio around a handful of 'anchor' positions. Anchor positions are shares of companies that possess characteristics that I really like: proven track record, strong management, wide moats, and solid dividends.

To design diversification into my portfolio, I seek anchors from various industries. Sectors from which I prefer to source my anchors include healthcare, consumer products, retail, utilities, finance, info tech, and energy.

Anchor stocks provide the foundation for my stock portfolio. I might add other names over time, but I begin with the anchors. Moreover, I tend to allocate more capital to my anchor positions than to others.

To demonstrate (and NOT to be construed as advice), my favorite anchor stock for many years has been Johnson & Johnson (JNJ). It possesses the qualities that I prefer, including more than 100+ yrs of operation in the healthcare sector (spread evenly across pharma, medical products, consumer health), infamous corporate culture, 50+ yrs of consecutive dividend increases.

There are risks, of course. The company is currently involved in several lawsuits concerning its products. Longer term, political interest in health care casts a large shadow of uncertainty across the entire sector.

The technical picture shows the stock price near a level of support touched several times over the past year. I've recently added a bit to my position around this price. Currently, JNJ constitutes my largest stock holding.

One more thing about anchor positions. As the name implies, anchors don't move--not without intention, at least. When I take on an anchor position, my intention is to hold it for life and then, hopefully, to pass it along to the next generation.

position in JNJ