Rule Two: Invest only in companies that are "best in breed." This includes companies that have tremendously-established brands or that have extremely strong emerging brands. This is key.
Rule Three: While the old investing axiom, "past results do not guarantee future performance" is true - and frequently repeated - it is also misleading. In order for a stock to meet the criteria of this investing strategy, it has to be a strong past performer. It doesn't have to be up over the last year or even a couple of years, but the long-term chart has to be compelling.
Rule Four: Invest in mid-cap and large-cap companies and try to avoid small-cap names. This isn't an edict, as there are some great small companies that would fit into this investing framework, but make sure that most of your picks conform to this advice. Like many of the tips provided here, it is from the Benjamin Graham and Buffett school of thought. Furthermore, if you are investing in "best of breed" companies and preeminent brands, following this rule shouldn't be a problem.
Rule Five: Try to focus on companies that pay out dividends. Again, this is not an edict.
Rule Six: Ideally, you want to buy stocks that fit this framework either on significant market pullbacks or when the stock is breaking out from a large consolidation area or base.