Here, I guide you through the process of developing an effective investment strategy, show you where and how to buy shares, and show you how to adapt your strategy to favorable and unfavorable changes in tax legislation that may affect your after-tax profit. | Part V Managing Your Portfolio In this part. lthough other parts of this book don t exactly encourage you to micromanage your investments they do tend to focus your attention on the intricacies of finding and choosing dividend stocks. In this part you take a step back to get a better view of the entire landscape. Here I guide you through the process of developing an effective investment strategy show you where and how to buy shares and show you how to adapt your strategy to favorable and unfavorable changes in tax legislation that may affect your after-tax profit. Chapter 18 Choosing an Effective StockPicking Strategy In This Chapter Reducing your exposure to risk with dollar cost averaging Spotting value through the dividend connection approach Investing against the grain with the relative dividend yield approach Buying good stocks that have temporarily fallen out of favor Going for gold with proven Dividend Achievers ou ve mastered the basics. You can size up promising dividend stocks sift out real losers and manage a dividend stock portfolio as well as any investor on Wall Street. Now you want an edge a system you can rely on to pick the best of the best almost every time. Everyone has a favorite stock-picking strategy and you can find loads of information about various strategies on the Web or through books. In this chapter I highlight dividend stock-picking strategies that I deem the most fundamentally sound. You can pick one of these strategies or use any or all of them as a point of reference for developing your own unique approach. Minimizing Risk through Dollar Cost Averaging Regardless of what your dividend investment strategy is consider combining it with a dollar cost averaging approach. Dollar cost averaging isn t so much a stock-picking strategy as it is a method of systematically investing in anything over a long period. Here s how it works
