The stock market has gotten off to a nice start in 2025, continuing the success it’s posted over the past two calendar years. These gains translate into my Portfolio as well, as it’s seen a corresponding uptick in value.
It’s always good to start well, as it can catapult you into a successful year. If markets do turn south, at least you started with a cushion, a positive value that might take some time for the market to wipe out.
So far in 2025, 10 of the 11 market sectors are in the green. Only Information Technology is in the red, and only about 0.5%. Communication Services, Healthcare and Financials are the leaders to the upside, each with gains between 6% and 7% year-to-date.
In case you missed it, I’ve posted my 2025 Portfolio Goals. In there you’ll see what dividend income I’m looking to collect this year. I stuck with the same goals as last year, but updated some of the target numbers. Check it out if you haven’t had the chance.
One of my bonus goals this year involves either enlarging or eliminating my smallest Portfolio positions. If I’m going to have a position, it’s got to be meaningful enough to have an impact on my Portfolio either through capital appreciation or dividend income. Improving the size of these small positions will be something I work on all year, and something I’m sure I’ll be discussing in my monthly Portfolio Thoughts.
In this month’s Portfolio Thoughts post I’ll be discussing the following regular items…
- Price Movement – I’ll look at my top advancers and decliners in my Portfolio during the past month.
- Top 10 Review – I’ll update my Top 10 Portfolios stocks and how they changed rank this past month.
- Weightings – I’ll examine the sector weightings within my Portfolio and let you know where I’ve made progress with regard to getting into my preferred weighting ranges.
- Watch List – I’ll share which stocks I’m looking at as I prepare to invest my capital in the coming months.
Let’s check out my Portfolio Thoughts for January 2025…
Price Movement
Note – my price changes cover closing prices from 12/27/24 to 1/27/25.
My Portfolio kicked off 2025 in a positive way. The ratio of my stock gains to stock declines was decisively positive. The ratio was a solid 3.5 to 1. Of my 59 holdings, 46 gained in price, while only 13 declined. This ratio could have easily been better, as 8 of my 13 decliners lost less than 1.5% in January.
Here were the stocks with the biggest moves to the upside and downside…
Of my 46 stocks that rose in price in January, one stock was able to gain north of 20%. Another 5 stocks had at least a 10% upside move (the usual threshold I monitor for). Yet another baker’s dozen stocks gained at least 5%. There were plenty of gains to enjoy in this first month of 2025!
My top gainers in January were:
- CVS Health (CVS), surging 26.32%
- Medtronic (MDT), popping 14.52%
- Air Products & Chemicals (APD), rising 11.55%
- Union Pacific (UNP), jumping 10.65%
- JPMorgan Chase & Co. (JPM), advancing 10.23%
Make it 3 months in a row that there were no carryover stocks from the previous month. It’s difficult to sustain top 5 success for a 2-month period!
A pair of beaten down Healthcare stocks topped my gainers list in January. CVS led the pack with a monstrous 26.32% return, as it bounced off a 52-week low. CVS went from my worst decliner last month, to my best gainer this month. A much-needed turnaround to say the least! MDT also had a tremendous month, returning 14.52% for January, and essentially reaching a new 52-week high.
APD rebounded nicely in January after a double-digit percentage loss to end 2024. Its gain this month easily outpaced the gains for my other two Materials stocks as well.
After posting a nice gain this month, UNP recovered all its December losses (and then some), and is close to its 52-week high. UNP is on the right track (pun intended) for a solid start to 2025.
Lastly, JPM also forged ahead by a double-digit percentage this month. Most of my Financials stocks have been performing well, and JPM is no exception. January gains have led JPM to a 52-week high.
Note – 4 sectors in my Portfolio had all their holdings in the green this month: Utilities (5), Real Estate (4), Materials (3) & Energy (2). Industrials (9) could have made the list, too, if not for a sub-1% loss from Cummins (CMI).
Of my 13 stocks that fell in price, two stood out. Both of them posted losses over 10%. After that, all other losses were less than 2.2%. Short of those two outliers, big decliners were hard to find in my Portfolio as we kicked off 2025.
My worst decliners in January were…
- Broadcom (AVGO), tanking 16.39%
- Hershey Co. (HSY), sinking 10.50%
- Texas Instruments (TXN), slipping 2.17%
- Merck & Co. (MRK), drooping 1.77%
- T. Rowe Price Group (TROW), retreating 1.68%
Taking a cue from the gainers list, there were no carryover stocks from last month in the decliners list either.
My worst decliner was AVGO. This stock was at the top of my gainer’s list last month. How quickly things can change! In January, it lost about half of the gains it posted in December. News earlier this week regarding Chinese AI research lab DeepSeek put a big dent in the stock price of AVGO, Nvidia (NVDA) and other AI-related stocks. Worrying investors was info that DeepSeek’s model is open-source, cost-effective, and requires significantly less computational power compared to its rivals.
My other double-digit decliner in January was HSY. The stock has performed poorly recently. This is now 4 consecutive months of losses for HSY. I’ve been buying HSY in recent weeks, building out my position. I suspect I’ll add more shares in the weeks ahead.
TXN pulled back a minor 2.17%. However, this now makes it 5 straight months that TXN has declined. The losses typically aren’t large, but TXN needs to get moving in a positive direction.
MRK actually one-upped TXN and declined for a 6th consecutive month by posting a 1.77% drop this month. I’m thinking the bottom could be in for MRK, but my position is big enough at this time, so I’m not looking to add any shares of this stock.
Rounding out the list of my top decliners for January was TROW. It was only a 1.68% decline for TROW though. The stock has basically traded in the $100-$125 range over the past 2.5 years. The short-term earnings forecasts for TROW don’t show growth, so I expect TROW may have a hard time breaking out of this trading range anytime soon.
Top 10 Review
It’s now been 4 consecutive months that all 10 stocks in my Top 10 have remained the same. I can’t recall the last time such a long period of time went by since I had a change. In any case, the group is starting to solidify itself within my Portfolio.
Of course, despite the lack to changes to the names in my Top 10, the existing stocks did mix up their places in the rankings. I had 3 pairs of stocks switch places in the Top 10, while the remaining 4 stocks held steady in their existing spots. The biggest riser or faller in my Top 10 moved just a single spot.
AVGO kept its grip on the #1 spot, although it fell short of claiming a 10% share of my Portfolio after its 16.39% decline in January. Its size is also no longer twice as big as any other stock in my Portfolio. It’s probably for the best that AVGO retreated a bit after such a stellar run in 2024.
QCOM and AFL switched spots at #2 and #3, with QCOM claiming the higher spot. QCOM gained nearly 8.9% in January while AFL posted a 4.6% rise.
The next three spots saw no change. RPM held onto the #4 spot with a little over a 3.1% gain in January. Visa continued to lay claim to the #5 spot with nearly a 5% gain this month. Meanwhile, the #6 spot continued to belong to BLK, even though it gave up almost 1.4% in price during the month.
LOW and ABBV switched spots at #7 and #8. LOW moved up while ABBV slid down. A gain of better than 8% helped LOW advance, while a slip of a little more than 0.6% saw ABBV get passed up.
Lastly, I had my 3rd pair of stocks that switched spots. FAST and PG swapped positions in the rankings, with FAST climbing up to #9 and PG falling down to #10. FAST was able to gain about 4.5% during the month while PG was basically flat.
After posting 10%+ gains in January, UNP and JPM are now within striking distance of getting into the Top 10.
From the table above, my Top 10 holdings now comprise 41.47% of my Portfolio value. This is a big decrease of 1.19 percentage points compared to last month. The significant loss from AVGO was the reason behind the weighting reduction. Seven of my Top 10 stocks finished with gains in January, with QCOM and LOW leading the way.
As for the dividend weighting of my Top 10, it finished the month at 29.27%. This is a decrease of 0.09 percentage points compared to last month. Despite the dividend raise from FAST recorded early this month, the Top 10 showed small declines from the other 9 stocks that more than offset what FAST provided.
Weightings
In general, for the Sector Diversification, I target being within +/-3 percentage points of the sector weightings of the S&P 500. For the SuperSector Diversification, I target being within +/-5 percentage points.
The “Weight Diff.” column shows which sectors sit outside my preferred weighting ranges. If I’m overweight a sector, it’s shaded green. If I’m underweight a sector, it’s shaded red. If I’m within my target weighting range, then no shading exists.
I didn’t record much of a change compared to the end of last month. I still have the same 3 overweight sectors and same 3 underweight sectors.
With regard to my overweight sectors, the weighting differences for two of them (Industrials & Materials) were essentially unchanged. As for the 3rd sector, Financials, I made progress reducing the weighting difference by almost 0.3 percentage points. I believe it was probably the under-performance of my Portfolio relative to the S&P 500 sector that made the difference. Unfortunately, this is not the way I wish to reduce the weighting difference.
When it came to the underweight sectors, my weighting differences got reduced in Information Technology (by almost 1 percentage point!) and Consumer Discretionary (by almost 0.25 percentage points). However, things got worse in Communication Services, as my weighting difference increased by 0.37 percentage points.
Information Technology still comprises about 21% of my Portfolio weighting, with Financials sitting around 18%. Energy is my smallest sector at 1.42%, but Real Estate isn’t much bigger at 2.21%.
Healthcare remains the top sector for me for dividend income at better than 16%, yet Financials aren’t too far behind at 15.56%. Both Information Technology and Industrials each provide better than 12% of my dividend income. Energy provides the least amount of dividend income for me.
As always, I’ll keep all my sector weightings in mind as I continue to adjust my Portfolio, and my watchlist.
Watch List
In January, I made a couple of stock purchases from last month’s Portfolio Thoughts watchlist, but I’ve yet to post about them (next post, I promise). Thus, I won’t go into the details here, but just know that my watchlist came in handy again this past month.
Stocks were on the upswing in January, but it still seems there are plenty of stocks in the market that are worth an investment. It certainly doesn’t seem that all sectors of the market are participating equally in the gains. Given this, I remain on the lookout for a good purchase opportunity, and I’ll probably check out stocks from my watchlist first.
Therefore, let’s check out what’s on my watchlist this month.
Within my Portfolio, here are a few stocks that I’m watching for possible additions…
I remain focused on my smaller positions, trying to make sure they reach that minimum 0.5% Portfolio weighting I seek.
McCormick & Co. (MKC) is still my smallest holding, but it’s been slowing rising in price. I’m keeping my $72 price target, and perhaps I’ll get a chance to add below that level.
I could stand to add some shares of American Tower (AMT). It’s been almost a year since my last AMT buy. I’m currently waiting for a drop below $180.
Of my smaller positions, FedEx (FDX) is one I’d like to grow more than many of the others. A price dip below $255 would be intriguing. This would require about a 5% drop from current levels.
Adding to my NNN REIT (NNN) position below $39 would be nice. Alternatively, I wouldn’t mind buying some shares of Realty Income (O) below $53. Neither stock is far away from those respective levels.
Hershey Co. (HSY) is still generating buying interest from me. It’s well below last month’s target price of $170, so I probably just need to find a way to secure another share addition.
In the Tech space, where I’m always looking to add, Amdocs Ltd. (DOX) dipping below $85 might entice me to make a small share addition.
As for non-Portfolio stocks that I’m watching…
Both Elevance Health (ELV) and Zoetis (ZTS) are still on my radar, even though they climbed in price in January. ELV jumped over 8%, while ZTS rose a more modest 6% or so.
Tech stock Intuit (INTU) fell below $600 recently and piqued my interest. INTU is not a big dividend payer (sub 1%), but it offers growth.
Thoughts?
Are you looking to make big portfolio changes this year, or stay the course? Do you believe the markets will finish positive for the year after a nice start in January? Please share your thoughts!