6. From time to time one will also have additional funds to invest, perhaps from a promotion, inheritance, winning the lottery, or whatever. Since I am rather conservative, I prefer that one have a significant amount of "rainy day" funds in money market or short-term bond assets, to use for the purchase of great value picks when the markets take serious tumbles. How much to have set aside in this way is an individual decision. A larger percentage ready to hand in case of a major drop in the markets reduces the chance of overall long-term loss, increases the likelihood of picking up significant equity deals on the cheap while others are bailing out of stocks, yet, if left unused for new investments most of the time, also can reduce one's average portfolio performance. Of course, having much less set aside in low risk assets can result in nail-biting volatility in one's total assets when the inevitable happens and stocks turn seriously south. It can then take years to recoup one's losses. If one has substantial other assets or resources that are low-risk, for instance a government pension or several rental houses that are providing more income than their mortgages, taxes, and maintenance costs, this can moderate one's need for additional conservative precautions quite a lot. When one finds that, over and above a prudent investment reserve, he or she has plenty of income available for further stock purchases, it can periodically be used for the purchase of further stocks meeting all the above buy criteria.
Below is a table with my picks among equities currently meeting the basic five buy standards as of 2/18/13. As usual, I suggest that readers do the research, make their own selections, and/or rely on trusted financial consultants before investing.
Goldilocks Investing Top Pics
|Company or Partnership||Stock|
|Kohlberg Kravis Roberts and Company, L.P.||KKR||$18.03||6.8%||8.2|