Topic: How To Invest

What is Pat's commentary for the week of March 27, 2012?

Article Excerpt

Successful investors never “go for broke,” as the saying goes. Instead, they try to arrange their portfolios so that they profit more or less automatically over long periods. You do that by tapping into the long-term growth that inevitably comes to well-established companies when they operate in relatively free economies during relatively prosperous years and decades. To do this, start by following our three-part Successful Investor investing philosophy. First, invest mainly in well-established companies, since they tend to continue to prosper over long periods. Second, diversify across most if not all of the five main economic sectors. Third, downplay or avoid stocks in the broker/media limelight, where high investor expectations tend to expand risk. Note that our Successful Investor approach automatically limits your involvement in notoriously trouble-prone areas like new issues, start-up companies and illiquid investments. Of course, you also need to stay out of companies when you have doubts of any sort about the integrity of insiders. You need to recognize…