AT&T Inc (T)

[chessmaster315]

Its called "overdiversification". Warren Buffet does not have "that many stocks..especially considering the size of his portfolio.

By spreading it around, this is what happens:
Lets say you had 10 stocks (in your portfolio allocated to stocks) with 10 percent allocated for each. a

Typically what happens is some of those 10 do well, and others not so good.

So, you see a chance to "take some profits" in 3 of these. What do you have left? ...the stocks that didnt perform as well.

You keep that up, and you wind up with a portfolio of loosers, quickly consuming any "profits" you took.

Much better: Ony buy a company which you intend to stay with a long time. Forever.
going in and out, in and out, will make your broker money..just not you.
Very few of the professional money managers "beat" the S and P 500 index. Its highly unlikely you will either.

I would rather invest in "one" company that Im very confident with, than 2 or 3 companies that Im less sure about.