Sunday, July 14, 2013

The “Rule #1 Investing” Strategy


Rule #1 Investing just may be a dream for a do-it-yourself portfolio manager who hopes to reduce risk of loss to a minimum. Yes, its name is also Warren Buffett’s admonition: Never lose money.
The strategy is AAII’s version of the Phil Town way of evaluating stocks worthy of acquisition. Through May 31, 2013, its YTD (year to date) price performance was +24.1%. Its 10-year annual price gain: +20.7%. 5-year: +21.8%. Its 3-year: +42.9%.
Those numbers seem to tell us that cautionary investing doesn’t necessarily lead to tiny gains. Phil spells out his strategy at length in his book: “Payback Time.”
On May 31, 2013, these were the stocks that met the tests of Phil Town’s strategy: QCOR (questcor Pharmaceuticals), MELI (Mercadolibre Inc.), Apple (AAPL), ZAGG (Zagg, Inc.), and KLIC (Kulicke and Soffa Industries).
Selections updated through June 30 will be made available by AAII later this month to AAII members. If you’re not among them, you can join now online.

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