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Author: pussinboots1 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121444  
Subject: Re: Investing Moves I Will Avoid Date: 2/17/2006 9:22 AM
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I'm a believer in rules like this. And, I think many of the rules that make your tax accounting simpler can also help improve your investing. I personally wouldn't avoid a stock b/c of a ROC dividend; I think only a company with shareholders' interest in mind would make such a dividend. And, splits, especially frequent, odd ones tend to be bad for sharesholders as they cost the company money, but add no value (besides add'l liquidity). Here are some rules I follow:

5. Hold each share you buy for at least 1 year, 1 day. Besides the obvious tax advantage, this also helps you avoid emotion-based selling, *and* it encourages you to do more research before buying the stock (since you know you won't be able to flip it when the stock tumbles in a month!). This rule has helped me "turn" a number of "losers" into "winners." Without the rule, I would have been tempted to sell at a loss.

6. Never reinvest dividends. I don't mean that you shouldn't use dividend money to purchase the dividend-granting stock. I simply mean that you shouldn't participate in any sort of automatic-reinvestment scheme, like DRIPs. They create lots of little transactions and provide little value. Instead, let dividends build up to a substantial level, then use the money to purchase shares in a single stock---whichever stock represents the best value at the time.

Puss
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