Investment Rules Summary

Investment Rules Summary

Rule 1

Take my current age and equate that to the percentage of the overall portfolio tied to low risk fixed income products, with the balance dedicated to the inherently higher risk, higher reward equity market.

Rule 2

Weigh each major market sector exactly the same.  Eleven sectors total; therefore, I invest 1/11th of my portfolio’s equity portion into each major sector.

Rule 3

Hold a minimum of three equities in each sector, with a maximum amount per equity of $10,000.  This means that at a minimum, I will have at least 33 equity holdings.

Rule 4

Identify companies that have brand recognition, and have a history of providing valuable products or services that are easily understood.

Rule 5

Look for a history of stable and growing dividends, with a preference for companies that have a reasonable divided yield within the typical range for the asset class.

Rule 6

Only make trades when mathematical classifications indicate that there is a need to align the holding’s market value with the portfolio’s target value.

Rule 7

Keep the value of any trade made to a minimum of $500, in order to keep trading commissions below 2% of the total trade value.

Rule 8

If the market value of a single holding drops to the point where the amount invested is double the market value, liquidate the entire holding and find a new investment to fill the void.