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Gmc2020

03/19/14 11:21 PM

#18479 RE: Migelito #18477

Not exactly... What Mean is two fold 1) the larger the % in one investment the less you diversify away the risk making it possible for larger gains or larger losses.... Higher risk! 2) especially in small caps the more you put into a single investment the greater the likelihood you miss other opportunities because you funds are tied up waiting for a single stock to make a move

Mariam*

03/19/14 11:27 PM

#18480 RE: Migelito #18477

Migelitto,

It makes sense, it's meant to minimize ur risks..in case a company fails and u happen to put all ur money there..chances are if u spread ur money, not all companies can fail at the same time. Could but very rare.

Anyway, i am the last one to talk. I am undisciplined, I do not follow these rules well...Working on it..