According to the National Reading Panel, there are five primary components of reading instruction:
1) Phonemic awareness,
4) Vocabulary, and
A good discussion of these components is found here on the National Institute of Child Health and Development website. Another website that I've learned from is BalancedReading.com; unfortunately, the website's author inexplicably disses synthetic phonics, but he has useful information on other elements of reading instruction.
I've already given dd5 a good start on reading, and she now reads books to herself on a daily basis. Looking back on what we have done, I see how I have been addressing all five components above with her even while I thought I was just "doing phonics"--
1) For phonemic awareness, I sing her an "ABC Song" nightly, a unique version each time, e.g., "A is for anteater, B is for bear, C is for calculator, D is for diaper, E is for eclectic, F is for Frank, etc."; her phonemic awareness has also been promoted by the games and activities on the Starfall website and a "lift-the-flap" Phonics book.
2) For explicit phonics instruction, we have been slowly working our way through Reading with Phonics (my mother, a former schoolteacher, gave it to me). The Starfall website has also been helpful in teaching dd5 phonics.
3) Fluency is gained through "practice, practice, practice", and that's what we do by reading and rereading favorite books--something we have done since she was a baby--and repeated reading of sentences and paragraphs in our phonics book that she didn't read fluently the first time around. I don't teach "sight words"; in fact, I consider the memorization thereof to be a waste of time (nearly all "sight words" can be sounded out mostly or completely) and potentially confusing. As she practices reading, she naturally memorizes words she sees repeatedly, and she learns the words in varied contexts, which contributes to development of her vocabulary.
4) I build her vocabulary by exposing her to a wide range of subjects via books, videos, and conversation. When we come across a word she doesn't know in any book she's reading (including the phonics textbook), I tell her what the word means. Sometimes I get carried away and start talking about vowel shifts in words borrowed long ago from old French or German, but she's tolerant of my linguistic meanderings.
5) I work on comprehension by talking with her about what she has read or watched. This is an area where a homeschooling parent has a huge advantage over a schoolteacher. One-on-one instruction means we can tell when our child doesn't really comprehend something and can immediately respond with activities targeted to help her understand a written or spoken text. In a group setting, it's easy to get away with not understanding something. I sat through many lectures in college that I didn't understand, and usually the professors had no clue that I was wallowing.
According to this report by the National Council on Teacher Quality, only 15% of the college/university education schools surveyed actually teach future elementary teachers about all five components of reading instruction. That is discouraging since these five components do not seem like they should be overly controversial or difficult to discuss, and it only fuels distrust of education schools generally. On the bright side for homeschooling parents who are sometimes questioned about their "credentials" to teach their children, by perusing my blog post and the linked material, you have likely learned more about teaching reading than over 80% of recent education school graduates. Isn't that reassuring?