How to Protect Your Portfolio From Earnings Surprises

Company reports are one of Wall Street's best kept bad secrets

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I’ll leave you with one final thought.

Under the circumstances, this kind of information may shake your confidence in the system. I know it does mine. But there’s little we can actually do about it until the regulators, Wall Street, and Congress stop the incestuous relationships they maintain and force a return to more cash-oriented reporting standards.

So concentrate your investments in companies that have long histories of doing the right thing and management that has repeatedly demonstrated integrity.

Focus on companies with strong international cash flow and brands the world needs. Wants are secondary during difficult times like today. Needs are constant.

Finally, place a priority on dividend payers. People forget that dividends are not just about yield. Instead, dividends are an implied promise management has made to you as an investor.

Companies that keep their promises are far less likely to screw around with your returns.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/how-to-protect-your-portfolio-from-earnings-surprises-ba-fb/.

©2014 InvestorPlace Media, LLC

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