Message Font: Serif | Sans-Serif
No. of Recommendations: 4
..... Now I am in a position to consider going deeper into the Recommendations. Therefore I need an intelligent way to assemble a portfolio from the Buy section as well. However, I don’t want to buy (can’t afford) all the Buy picks and am wondering what criteria others have used to weed through the Buy list to make their selections......

...Are there specific filters or strategies others use to make selections to filter down the Buy list before purchasing the recommendations?


There probably are as many different strategies for building an II portfolio as their are members, with different financial circumstances, goals and risk tolerances....and (hopefully) different long-term financial plans. ;-)

That being said, some tools that one use include how much "Potential Upside" there is ( a column on the "Stock" page ), an absolute minimum dividend level, as well as a minimum dividend growth level ( 5 or 10-year history ). Also, I feel that one should pay attention to sector diversity, never having more than 20% or so in any given sector ( energy, utilities, consumer staples, consumer discretionary, etc.); a tool to use for this is the Industry browser at Yahoo ( )....and never having more than 5% in any one stock ( unless you are an uber-Professional ).

There are tons of due diligence tools out there:

In addition to the Income Investor "Buy First" and "Buy" lists, I often look at the logarithmic charts from the BMW Method after identifying a company I'd like to consider to establish a reasonable buy price:

And here are some more general DD approaches from other Fools:

And last, but not least, here is a great valuation archive, if you want to get deeper into analyzing stocks on your own:

Hope some of the above helps...if not...ask away!

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.