Although long-term total returns are the goal of the Global Investment Strategist’s Model Portfolio, the end of the quarter presents a timely opportunity to assess its performance.

Since its inception on Feb. 17, 2006 until the end of the first quarter of 2012, the Portfolio has outperformed the Morgan Stanley Capital International All-Country World Index (MSCI World Index) and the S&P 500 over the same period.

Since inception through Dec. 31, 2011, the Portfolio has returned 117 percent. The MSCI World Index gained 19 percent and the S&P 500 gained 24.5 percent over the same time period. All returns include dividends.

For the first quarter of this year, the portfolio gained 14 percent while the S&P 500 gained 12.6 percent and the MSCI World, 11.7 percent. All returns include dividends.

Please note that the Portfolio’s returns do not include returns generated by the recommendations in the Permanent Hedges category of the Global Investment Strategist’s Portfolio. The Portfolio is long-only and does not hold cash. These restrictions provide a clearer gauge of the Portfolio’s overall performance relative to its benchmark indexes, as the major indexes are all long-only.

The Portfolio’s strategy is focused on profiting from vibrant, long-term opportunities by investing in fundamentally strong companies. We also balance the long-term risks and opportunities facing global markets with hedges recommended in our Permanent Hedges Portfolio.

Source: Bloomberg

The four permanent hedges—US Treasury bonds via iShares Barclays 20+ Year Treasury Bond (NYSE: TLT); gold via SPDR Gold Trust (NYSE: GLD); the short on US consumers via Consumer Discretionary SPDR (NYSE: XLY); and the long recommendation on corporate credit via iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: LQD)—continue to perform respectably as a whole.

Since we added these recommendations to the Portfolio, the long Treasury pick has produced a 36.5 percent return. Gold has gained 192 percent since my recommendation; being long on US corporate credit has given us a 35 percent return; and shorting the American consumer has turned a loss of 17 percent. This last position is a leveraged hedge against any long-only, Asia-focused portfolio.

Top Gainers & Losers

After big gains in our recommendations, we often advise that you take profits off the table. We made this recommendation twice during the course of the first quarter. See the alert section on the website for more details.

The best way to take profits off the table is to sell enough stock to pocket all your gains while letting your initial investment run. This is a time-honored approach to securing returns while maintaining exposure to multiyear investment themes.

In the first quarter of 2012 the Global Investment Strategist Model Portfolio’s top gainers (including dividends) were:

Naga Corp (HK: 3918, OTC: NGCRF), up 80 percent.

Tata Motors (NYSE: TTM), up 59.6 percent.

Fast Retailing (Japan: 9983, OTC: FRCOY), up 35.6 percent.

HDFC Bank (NYSE: HDB), up 29.8 percent.

Mitsubishi Estate (Japan 8802, OTC: MITEY), up 28.9 percent.

This brings us to the laggards. I don’t suggest selling any of these stocks; these companies still continue to offer value and growth potential.

The Portfolio’s five biggest laggards in the first quarter of the year were:

Beijing Enterprises Water Group (Hong Kong: 371), down 16.5 percent

Chunghwa Telecom (NYSE: TLK), down 7.6 percent

Boshiwa International Holdings (HK: 1698), down 4 percent.

PT Telekomunikasi Indonesia (NYSE: TLK), down 1.2 percent

Finally, the five core stocks around which you should build your portfolio, in order of preference are China Construction Bank (Hong Kong: 0939, OTC: CICHF); KB Financial Group (NYSE: KB); Gazprom (OTC: OGZPY); Banco Bradesco (NYSE: BBD); and PT Telekomunikasi Indonesia (NYSE: TLK). Please visit the Portfolio page to see our complete stock rankings.