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Benjamin Graham[1] is far and away one of the biggest names in the history of investment strategizing. In his book The Intelligent Investor, he describes five strategies investors can use to maximize their success in the stock market. The key factors in determining which of Benjamin Graham investment strategies[2] to use are how much effort you are willing to put in and what you are hoping to get from your portfolio (higher returns or more stable growth).Here we will take a look at the strategies he developed decades ago which are still being successfully used by many investors today.Strategy OneThis strategy requires the least amount of effort and creates a portfolio of defensive stocks. It is based on Graham’s assertion that mutual funds did no better than the market average when compared to the indices. By that logic, it is better to invest in index funds which can be found in a popular index like S&P 500 (Standard & Poor’s 500) or DIJA (Dow Jones Industrial Average).It requires so little effort because, according to Graham, which index funds you specifically choose makes little difference.Strategy TwoThis is another strategy for building a defensive portfolio, however, it requires a little more effort than the first on the part of the investor. This strategy outlines a set of strict criteria which a stock must meet in order to be considered a defensive grade stock. That is, a well-established and financially strong stock which will have relatively low risk.The criteria are as follows:The company must generate a minimum of $500 million in sales.[1]The company’s current assets should be at least twice the amount of its current liabilities.The long-term debt that the company has should not exceed its net current assets.The company should have some earnings for the common stock each year for the past 10 consecutive years.The company should have a record of continuous payment on its dividends for at least 20 years.A minimum increase of at least one third should be evident in its per share earnings over the past 10 years.The current price of the stock should not be more than 15 times the company’s average earnings.The current price also should not be more than 1.5 times the book value.In addition to these criteria, Graham developed a formula for calculating the ideal price of a defensive grade stock. The formula (the output of which is commonly known as the Graham Number) is as follows:In this equation, EPS refers to the company’s earnings per share and BVPS is the book value of equity per share. Both of these figures can be found in the company’s financial records.For this strategy, it is recommended to have a portfolio of 10 to 30 stocks. However, because the companies which meet all of the criteria are limited to the larger, well-established ones, it requires little effort beyond the initial selection of stocks.Strategy ThreeUnlike the previous two strategies, this one is geared toward the riskier value stocks. It also requires more diligence in making investments and tracking them to ensure you get your desired returns. In this strategy, Graham outlines the criteria for selecting enterprising grade stocks.In order to be considered a relatively safe enterprising stock, the company must fulfill these requirements:The current assets must be at least 1.5 times the current liabilities.The amount of debt cannot exceed 110% of the current net assets.It must show evidence of earnings stability; meaning there should be no deficit reporter in the last five years.The company must also have a record of dividend payments. Because enterprising stocks are necessarily less established, it does not have to be as strong as with a defensive stock. However, there must be some current dividend.It must also show signs of growth in earnings. This criterion is fulfilled if the previous year’s earnings are higher than its earnings five years prior.The price of the stock must be less than 120% of the net tangible assetsBecause enterprising grade stocks are less established, investors should have a more diversified portfolio of at least 20 stocks. This type of portfolio also requires more careful selection, verification and regular tracking and balancing.Strategy FourThis one requires the maximum amount of effort from the investor because it involves the most high risk stocks: NCAV (Net Current Asset Value) grade stocks. These are typically smaller, emerging companies that show a lot of potential but do not yet have an extensive record to ensure profitability.Graham advises that in selecting NCAV stocks, investors should immediately eliminate any stocks which have reported net losses at any point in the past year. Furthermore, the price of the stock should be lower than the company’s net current assets. Due to the high risk of these stocks, it is recommended to have a very diversified portfolio of at least 30 stocks.Strategy FiveGraham’s fifth strategy is much less concrete than the previous four and is not recommended for most investors as it requires an extremely high level of effort and is very risky. This is due to the fact that it is not a strategy based on quantifiable factors like financial records or market trends.Instead, this strategy requires investors to look at special situations such as acquisitions of smaller companies by larger ones, breakup of holding companies, arbitrage operations, and companies involved in complicated legal proceedings so that prices are uncharacteristically low. Essentially, this strategy looks at the company’s current situation rather than simply its finances to predict the future success or decline of its stock.This strategy should be used in conjunction with one of the other strategies since on their own these special situations are too speculative to be useful predictors of future results. This combined use with other strategies is also advisable because investors looking to use this one should already be quite familiar with the other four before attempting something so complicated and high-risk.Creating a balanced portfolio:Another great option for investors is to use two or three of these strategies in order to create a balanced portfolio which contains defensive stocks as well as the riskier enterprising and NCAV stocks. With such a portfolio, you will be able to have the security of defensive stocks along with the higher returns of the enterprising grade stocks.[1] In Benjamin Graham’s original set of criteria he specifies $100 million. This figure adjust for the inflation since he wrote in 1973.Footnotes[1] Benjamin Graham - Wikipedia[2] Benjamin Graham Investment Strategies

Exchange Traded Funds, more commonly known as ETFs are investment portfolios that may be traded intraday like stocks, allowing investors to buy and sell shares at market determined prices. According to the Securities and Exchange Commission (SEC), Exchange Traded Funds are, “Investment companies that are legally classified as open-ended companies or Unit Investment Trusts.” ETFs are mainly structured as such in the United States. There are, however, other structures of ETF’s that also exist - primarily for Exchange Traded Funds that invest in currencies, commodities, and futures.As mentioned in the U.S. Securities and Exchange Commission site:Most ETFs seek to achieve the same return as a particular market index. That type of ETF is similar to an index fund in that it will primarily invest in the securities of companies that are included in a selected market index. An ETF will invest in either all of the securities or a representative sample of the securities included in the index.after you know what ETF is. Now I can explain what S&P500 ETF is.S&P 500 ETF seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500 Index.You have 3 big companies that track this exact index: SPDR (SPY) and Vanguard (VOO) and iShares (IVV)Now, one last thing to pay attention to is the expense ratio of an ETF. It will effect your return in the long run.

I love Pennsylvania. It is one of the oldest States — actually one of only four Commonwealths of the United States that began as land grants to the proprietors who were also granted broad powers to govern it. It is a beautiful state with mountains and trees and enormous resources and hard working people with old fashioned values. .I have lived in Pennsylvania most of my life. One thing I have learned is not to let our politics drive me crazy. The big cities, Philadelphia and Pittsburgh tend to be Democrat. The more rural counties tend to be Republican. The politics are rough and tumble. Politicians of both parties are always attempting to gain an advantage in any legal way they can. Gerrymandering, or arranging the voting districts in strange odd-shaped ways allows certain districts to have “safe” seats. The Republicans currently have the upper hand and have redistricted to their advantage. Democrats are fighting back hard through the legal system. *Democrats hold only 16 of 50 Senate seats, and 83 of 203 seats in the House. Clearly and unambiguously, Republicans have been in control and have used that control to re-draw voting districts in their favor. Democrats challenged the resulting gerrymandered mess and the state Supreme Court has recognized that the Republican-drawn districts are illegal* It is Pennsylvania politics as usual. Nothing to get crazy about… just fight on… elections are always important—-the next one, perhaps more so than ever. Thankfully, most of our Pennsylvania politicians are house broken. Just imagine if we had a couple of California’s Congresspeople. Now there’s a reason to get crazy.EDITThere was a factual error in an earlier version of this answer. My apologies and a word of thanks goes to Michael Furtado for the correction. The part of the answer above between *’s belongs to him with thanks. (His kind permission to use this does not necessarily mean he agrees with anything else I’ve written above.)