Rule Of Five

The Rule of Five is BetterInvesting's method of letting you know you're not perfect and neither are your stock selections.

It states "For every five stocks you select using BetterInvesting methods, 

• one will do much better than you expected, 
• three will do about as well as you expected, and 
• one will do much worse than you expected."

The Rule of Five forms the basis for the first step of portfolio management, defense.

Here are the three possible outcomes for a stock's fundamentals on the SSG.

Defensive portfolio management's ONLY concern is finding stocks whose FUNDAMENTALS of SALES, PRE-TAX PROFITS, EPS, & PRE-TAX PROFIT MARGIN are not meeting your projections for future quality. Click here for a more indepth discussion of defensive portfolio management or click here to see how the PERT Report is used to implement defensive portfolio management.

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Last Modified 2005-05-13 


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