Teaching my daughter to read the CM way?

My daughter is 5 and we have been working on beginning reading skills for awhile now. She wants to learn to read SO badly. I decided that I didn’t want to purchase a curriculum for reading. I found that reading from one of the winnie the Pooh books we found at the library was working for us. Lots of repetition and it was fun and interesting for her. What I did was I would point to each word as I read it. Doing it this way I had to read a bit slower than I usually would. But when I came to a word that she can sound out I would keep my finger there and she would know that she needed to sound it out. As far as the sight words went I would pick a word each day and tell her this is “the” and everytime you see me point to this word you need to say it. So when I came to it I would pause and she would remember the word. We added to the list of sight words so she wasn’t just saying a word because that was the word she was supposed to remember. I also started telling her little phonics tricks such as with the “ee” in bee or see. I told her that when she saw those letters right next to each other they say their name in unison. And I would say “e” in a funny way. She remembered it and now can read those words. She is even picking out some of the smaller words in bigger words such as the in then. That was one of her sight words she learned. Question is, is this the right way? Am I going to cause a problem down the road by doing it this way? Is there something else I should be doing?  This is my youngest the others learned to read in public school. So this is a new and scary thing for me..