NOTE:
Before I go any further, please be advised that I am a STRONG believer in mutual funds for wealth building. As a matter of fact, 95% of my portfolio is invested in mutual funds with only 5% invested in individual stocks. This way I can leave the stock picking descisions to professionals who have the expertise and use of large research resources. I do, however, spend considerable time "picking the pickers" and choose funds whose managers exhibit superior past results.
Okay, what principles do I apply when managing my portfolio?
Buy Low
- Low stock price, ie: value funds
- No-Load funds only
- Low total fund fees < 1%
- Low turnover rate
- Low volatility
Sell High
- Set goals-don't make your targets moving targets
- Sell when fund stays below top 25 percentile in group
- Sell when you want to, not because you need to
Be Patient, Maintain Discipline
- Delay paying income taxes
- Stay put during market corrections (sigh)
- Believe in the market (gulp)