Michael O'Higgins  Michael O'Higgins is President of O'Higgins Asset Management, Inc., an independent investment management firm which manages portfolios for high net worth individuals, institutions, and investment companies. Books Beating the Dow , HarperBusiness, 2nd ed., HarperBusiness, 2001 Beating the Dow with Bonds , HarperBusiness, 1999 Beating the Dow -
Get paid for taking risk. Historically, investors have been paid handsomely for taking the risk of owning stocks. If the earnings yield, also known as the earnings/price ratio, is below the yield on AAA Corporate bonds, avoid stocks and put your money into long term 0% coupon U.S. T-Bonds. -
If the price of gold is rising , don't buy bonds. The price of gold has correctly predicted the course of long term U.S. interest rates in 26 of the last 32 years . If gold's price has risen over the past year, avoid bonds. -
When buying stocks, stick to the 'Dogs of the Dow'. The 10 highest dividend paying DJIA components have consistently beaten the Dow by wide margins with below average risk. -
Low price 'dogs' do even better. A strategy of buying the 5 lowest dollar price of the 10 highest dividend yielders, has compounded at close to 20% per year since 1972 compared to 13% for the Dow and the S+P 500. -
Asset allocation is your most important decision. Long term studies have concluded that 85% of investment success is due to asset allocation. By using the above described strategy, an investor would have earned annual returns of over 22% versus under 13% for the major stock averages since 1968. www.ohiggins.com 'Virtually every blue chip growth company ultimately has matured and become a no-growth company. Of America's 100 leading companies in 1920, only one is on the list today (GE).' ”Steve Leuthold |  |
