Our investment philosophy is fairly simple.  Maximize returns and minimize losses. Sounds like common sense.  But this philosophy is one of the hardest things to learn and practice in the investment process.  In the near-daily pursuit of best possible returns and the heat-of-the-moment investment decisions, investors often willfully or unwittingly disregard the most common rules of investing. Maximizing Returns and Minimizing Losses can occur only if investors follow an investment system.  Once they gain confidence in the system, investors need to have the discipline to operate within the rules of the system.  This is easier said than done.  In a hard situation, when emotions are running high, these rules often are the first casualty.  As investors begin to operate out of the investment system, which is expected to protect them by securing gains and limiting losses, they expose themselves to the possibility of greater losses. Everyone likes to talk only about profits.  But in the stock market, losses are more frequent than you get to read about.  For every single profitable trade, there are many more trades that end in losses.  Any experienced investor will acknowledge this market fact.  Financial markets operate on a risk-reward basis.  If you invest frequently over a long-term, then it is axiomatic that losses will occur sometime over that term.  An investor cannot completely foresee or forecast the entire gamut of economic and non-economic scenarios that may occur and affect the investment performance.  Consequently, there is no point in seeking an investment strategy in the stock market that avoids risk and losses.  There are other financial instruments more appropriate for a no-loss, no-risk strategy. Our strong belief is that an investment system that allows us to control and minimize our losses while allowing our investments reasonable flexibility to grow, will deliver index-beating performance on a consistent basis.  Risk can be wisely used to build wealth over time.  But we have to first manage the risk exposure that we assume when we step into the stock market. By taking care of the downside first, we are convinced we have a better chance of growing our upside. Wealth is created over a period of time.  We believe to build wealth, investors need to possess a longer-term investment horizon that extends over a few years.  At the same time one can continue to earn solid annual returns from the stock market.  A prudent investor will significantly enhance the longer-term portfolio potential and wealth prospects by leveraging the promise of compounding.  The returns that we assist you to achieve can be turned into significant wealth over time through the mechanism of compounding.  Albert Einstein, the great physicist, was so enamored by the concept of compounding that he termed them as his favorite kind of numbers. In case you forget the power of compounding, a $1 investment over 10 years earning just 10% return that is compounded (the return is not withdrawn but re-invested along with the original principal), would grow to $2.59 at the end of the 10 year period.  A 159% return over 10 years or average annual return of 15.9% and not just 10%.  While just earning a 10% return on that $1 principal, without compounding, would have provided you with $2.00, a total return of 100% over 10 years or an average annual return of 10%.  This additional return of 59% as a result of compounding is the critical building block for generating wealth over time.  We need to be able to grow our principal and returns consistently over time.  The magic of compounding should force investors to look over a longer term and build wealth through consistent returns rather than simply shooting for inconsistent annual returns. The other key element to wealth building is to seek a vehicle that can deliver a higher percentage of return within our risk parameters.  Just a little variation in the returns we secure every year can be the difference between driving in second gear or fourth gear.  A stock market typically delivers a return that is approximately 7% to 10% annually over time.  So our 10% example above can be applied to the stock market. Assuming that instead of 10% market average return, we are able to consistently secure 15% annual returns.  The compounding will take that additional 5% return and simply change the dynamics of your portfolio over a period of 10 years.  That $1 instead of growing to $2.59 will now grow to $4.05 or a return over 10 years of 305% or an average annual return of 30.5%.  A $100,000 portfolio at the beginning of year 1 will be worth over $400,000 in 10 years, and in 20 years it will be worth over $1.6 million.  For your convenience, we have included a table that shows the various results for different sized portfolios over a variety of time horizons.  You will clearly view how additional return can create a huge difference at the end of the horizon, and the accelerated wealth building as a result of the compounding effect.  That $1 is not so small after all. In our various newsletter products, we state an objective target performance of that particular product.  The objective can be to beat the market by 5% or 10% and so on.  We have to set realistic goals.  Doubles and triples in the short-term are rare.  First of all, investors need to recognize the fact that over 75% of mutual funds that are tracked by the Morning Star service never beat the market indexes over a period of time.  If we can be ahead of the market, then we are in a very small company of investors.  Then on top of that to beat the market consistently by a certain percentage is a remarkable goal.  That additional return over the average market performance, when compounded over a period of time can generate further wealth. Our newsletters embody our discipline and directness in a clear model portfolio with a $100,000 investment, divided almost equally amongst 10 investments.  We are not aware of the relevant size for your portfolio, and you will have to proportionately increase or decrease the investment size based on your portfolio.  At the beginning of each year, we start again with a $100,000 portfolio for the principal reason that investors can realize that it is never too late to start building investment wealth.  A model portfolio that grows to $500,000 will be too daunting for investors who are starting fresh.  Nonetheless, we have to be true to our number compounding ethic.  As you will read in our Performance section how our Model Portfolio using compounding has grown from $100,000 to over a $1 million.  The miracle of compounding is there for everyone to benefit.  Investors must attempt to reinvest the entire gains in their portfolio every year over their long-term investment horizon, in the same proportion as we invest in our $100,000 model portfolio.  If you choose to do so, then most likely your return performance will be even better in $ terms then the annual performance numbers captured in our newsletter.   By now you will have a very good sense for our philosophy.  Manage risk, deliver consistent market-beating returns year-after-year, and use the power of compounding to build wealth over a period of time.  As you will see, these newsletters with their recommended portfolios have delivered on their return objectives quite convincingly.  We hope to provide you with an investment system that will take much of the guess-work away, and contribute towards your investment success.