In Lesson 1 we talked about asset allocation and in Lesson 2 we talked about keeping costs down. Now we zoom into a portion of our asset portfolio which should consist of long term blue chip stocks. This is what I call the core portfolio. There is no magic in selecting these. You are looking for a good balance sheet, cashflow, and experienced management, and your horizons should be about a year at least. If your short term stocks can beat the performance of these blue chips year in and year out, then you can congratulate yourself on being able to beat the market. This is something which 80% of all professional fund managers fail to do, which is why in the long run you are probably better off with a buy and hold strategy of large caps, so remember to devote a portion of your money to names.
Here is what our favourite analysts think you should be holding for 2007. Note that there are a dozen more which should be added to this list, but I’ll leave you to find out which!
