Updating My Investing Rules.....

I've been thinking about the rules I wrote when I started this Dividend Growth IRA.  I went back and looked at the rules I wrote in 2012, and here they are:

After 5 years of running this portfolio, its time I reviewed and updated these rules a bit.

1.  I've eliminated the "core" and "non-core" designations.  This is tough to track and doesn't make a ton of sense anymore.  I have a taxable account where I invest in lower yielding stocks, and that serves as the non-core.  Today, I only invest in 2.5% yield or higher stocks for this account (usually)

2.  The 10% cash goal is still valid, and I'm a little light today.  I need to trim some of my larger/overpriced names.

3.  I still only add stocks at nice undervaluation, so that's been good.  I'm a bit slow to sell stocks if they are 15% overvalued.  I'll need to change that to higher overvaluation number, perhaps 30% or so.  I also rarely use stop losses.  I find they don't work too well, and usually get triggered, then the stock recovers quickly.

4.  There are other factors I like to look at these days, among them are:

• Debt level (50% or less preferred)
• Credit rating (at least BBB+)
• Morningstar rating (4* or better is what I usually require)
• ROIC, lately looking for higher than 10% here...though a soft target
• Revenue.  In addition to eps growth, I also like to see a growing revenue line
• Insider action (I like to see insiders buying the shares, and especially hate to see them selling)
• I also read the 10Q for the latest 2 quarters carefully, this is usually instructive, and gives me a feel for the CEO and whether or not she is a "bullshitter"