3 Stocks I think Should Be Included In Every Million Dollar Portfolio

The author recommends including Alphabet, Fortis and Coca‑Cola as inflation-hedging holdings: Alphabet is highlighted for its Gemini AI investment and market leadership in LLMs alongside 35% year-over-year cloud growth and Berkshire Hathaway buying in; Fortis is presented as a stable dividend generator with a 3.5% yield, 51 consecutive years of dividend increases, a $28.8 billion five‑year capital spending plan and EPS up 42% YoY; Coca‑Cola is valued for brand strength, potential pricing power and a target of roughly $12 billion in cash flow. These facts underpin a bullish case that these names can deliver long-term total returns to help preserve purchasing power in retirement portfolios.

Analysis

Market structure: Winners are large-cap AI/advertising platforms (GOOG) and regulated power utilities (FTS) that capture increased data-center electricity demand and predictable cashflows; consumer staples with pricing power (KO) benefit from sticky brand volumes. Direct losers include ad-dependent small-cap publishers and non-invested utilities facing higher financing costs; chip commodity prices and copper/energy demand should rise as AI capacity scales, tightening supply chains over 6–24 months.

Risk assessment: Key tail risks are regulatory/antitrust action against Alphabet or LLM safety failures (low probability, high impact), a sharp rise in interest rates that strains utility capex financing (FTS leverage sensitivity >3.5x net debt/EBITDA), and a demand shock lowering KO’s pricing power if real wages fall >3% YoY. Immediate effects (days) will be sentiment moves on earnings/Buffett disclosures; short-term (weeks–months) hinge on quarterly ad trends and permitting for FTS capex; long-term (years) depends on AI monetization paths and energy policy.

Trade implications: Direct plays: overweight GOOG for capital appreciation, buy FTS for 3.5% yield + dividend growth, and buy KO as defensive income. Use pair trades to express relative strength: long GOOG vs short META (or ad-reliant mids) for 6–18 months. Options: finance LEAP calls on GOOG (Dec 2026) by selling near-term OTM calls; for FTS/KO use covered-call overlays to boost yield while targeting 8–10% annualized total return.

Contrarian angles: Consensus underestimates the speed at which AI will reprice electricity demand and regulatory scrutiny simultaneously — a squeeze that benefits vertically integrated utilities but penalizes high-leverage generators. Market may be underpricing FTS permitting/timing risk (capex execution could push leverage temporarily >4x) and overpricing perpetual KO pricing power if consumer staples volumes fall >5% in a recession. Historical parallel: 2010s tech concentration rebound required durable monopoly economics; verify with quarterly ad elasticity metrics before adding size.

Key Decisions for Investors

• Establish a 2–4% long position in GOOG over the next 2–4 weeks; size with conviction add on any >7% pullback. Hedge with Dec 2026 LEAP calls (buy ~1.5% notional) funded by selling 30–60 day calls 25% OTM; set a stop-loss or trim at 12% drawdown from entry.
• Buy FTS for a 4–6% portfolio allocation as an income/core holding; target 12–36 month hold for dividend growth and capex execution. Exit/trim if reported net debt/EBITDA exceeds 4.0x or if dividend yield compresses below 2.5%, or take profits on >25% price appreciation.
• Initiate a 2–3% position in KO as defensive income; enhance yield by selling 6–9 month covered calls 10–15% OTM. Reduce position if YOY global beverage volumes decline >5% or company misses the next two quarterly cash flow targets by >5% cumulatively.
• Reduce US 10Y Treasury duration exposure by ~25% within 30 days and rotate proceeds into regulated utilities (FTS) and selective commodity (copper/energy) exposure to hedge rising electricity demand over 6–24 months; rebalance if 10Y yield falls >75bps from current level.