A.I.M. Users Bulletin Board

[Toofuzzy]

Hi Mark Re Diversification

you wrote:

>>The only time I would agree with not diversifying is if someone is starting out and doesn't have enough investment funds to properly diversify. At that point it doesn't make much sense to diversify because the commissions would become a significant expense. In that case you invest your funds in a good stock and hope for the best (or invest in a good index fund, but that's another story).<<

Like you I agree that diversification is desireable (other than buying a stock that will go up TOMORROW... yesterday)

For someone just starting out, who doesn't have a lot of money but will have more to invest over time, it is possible to use TIME to diversify.

Buy one stock or fund per year and after a few years they would be diversified. Personally I like "Exchanged Traded Funds" and the offerings by I-shares in particular. Buying funds eliminates "company risk" and you can use the funds to either diversify by industry or style (large cap, small cap etc)

Toofuzzy