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Suggestions for Building an Investment Portfolio

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By Industry – Timeliness

Value Line ranks industries in order of their Timeliness (relative price performance in the next 12 months).

Read the latest Value Line reports on the top-ranked industries. Select at least six industries rated highest for Timeliness.

By Stock – Timeliness

Value Line ranks approximately 1,700 stocks in five categories according to their Timeliness. The top 100 stocks are ranked 1 (Highest) for expected relative performance over the next 12 months; 300 are ranked 2 (Above Average); about 900 are ranked 3 (Average); 300, 4 (Below Average); and 100, 5 (lowest).

Make up a list of those stocks included in your six or more most timely industries that are also ranked 1 (Highest) or 2 (Above Average) for relative price performance in the next 12 months.

When and if a stock in your portfolio is found to be no longer a timely investment – that is to say, it has fallen to a rank 4 or 5 for Timeliness – make that stock a candidate for sale.

By Stock – Safety

Value Line also ranks approximately 1,700 stocks according to their Safety in five categories with 1 (Highest) expected to be least volatile and financially most strong, and 5 (Lowest) most volatile and least strong financially.

Eliminate from your list of Timely Stocks in Timely Industries those that fall short of your Safety standard.

These Safety ranks are significant and should not be ignored.

By Stock – Technical

Value Line also ranks approximately 1,700 stocks according to their expected price performance relative to the overall market in the next three to six months, based on complex analysis of the stock's relative during the prior 52 weeks. Unlike the Timeliness Rank, earnings are not a factor in the Technical Rank.

Particularly if you are a short term investor, you should look at the Technical Ranks and try to limit purchases to stocks with Technical ranks of 1 or 2. Under no circumstances, however, should the Technical Rank replace the Timeliness Rank, which has a superior record over the years.

By Stock – Income

Value Line estimates the next 12 months dividend yield of each stock at its most recent price. The expected yield is updated in the weekly Summary & Index. Value Line also shows for comparative purposes, the median yield of all dividend-paying stocks.

Eliminate from your list of Timely Stocks in Timely Industries those that fall short of your current-income standard. For example, if your yield standard is 3%, you may want to eliminate stocks that yield less than 3%.

When a stock is sold, replace it with another stock ranked 1 or 2 for Timeliness that also meets your standards for Safety and current income. It would be best in the long run to maintain diversification through six or more stocks in at least six different industries.

Value Line Reports

Value Line reports on each stock and each industry once every three months, on a preset schedule, in the Ratings & Reports section. The page numbers on which reports appear are shown in the weekly Summary & Index. When new information requires, a "Supplementary Report" is issued as often as weekly in the final pages of the Ratings & Reports section and online on the day it is written.

Read the latest Value Line reports on the industry groups and stocks that have qualified according to all of your standards.

Make your final selection of six or more stocks from the list that has been refined through the above procedures.

Read these report pages regularly to ensure that the stocks you own or are interested in meet your criteria.

Selection & Opinion

Value Line's Selection & Opinion section provides a current appraisal of the economy and the stock market. It recommends how much of one's capital should be invested in common stocks and how much should be set aside temporarily in cash reserves.

Read Value Line's Selection & Opinion each week. Also, go to the Value Line web site for our latest Daily Commentary.

When the Value Line service in its Selection & Opinion section recommends building cash reserves because the general market seems temporarily to be too high, sell stocks and invest instead in short-term government bonds or other safe instruments. In selling, dispose of stocks ranked 5, 4 or 3 for Timeliness, in that order.

Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions, or for the results of actions taken based on information contained herein. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. © Value Line Publishing, Inc. RIGHTS OF REPRODUCTION AND DISTRIBUTION ARE RESERVED TO THE PUBLISHER. The Publisher does not give investment advice or act as an investment adviser. Value Line, Inc., its subsidiaries, its parent corporation and its subsidiaries, and their officers, directors or employees as well as certain investment companies or investment advisory accounts for which Value Line, Inc. acts as investment advisor, may own stocks that are mentioned on this Value Line Web site.

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