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Technology Stocks : How high will Microsoft fly?
MSFT 488.20-1.1%12:03 PM EST

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To: Sonki who wrote (1592)6/15/1997 7:05:00 PM
From: mxyztplk   of 74651
 
Sonki, re: your nephew's account

I don't wish to advise you on any of these companies, as I have not studied them sufficiently to make a recommendation.

I suggest you only invest in individual companies in businesses you understand or otherwise have great faith in their ability to substantially outperform the S&P 500 over the long term (say, 20 years or more). Invest the rest of the money in broadly diversified index funds (e.g., Vanguard 500 or Total Market) or the equivalent (e.g., SPDRs).

Conservative investment advisors probably would recommend that you place 80% or more of the account in these broadly diversified mutual funds or equivalents. You might choose to be more aggressive than that, but if you choose to do so, realize that substantially outperforming the general market over the long term is a difficult feat. You need to consider the degree of risk, and the effects of the inevitable company-specific and general market downturns in your evaluations.

IMHO

Best regards,

Arno
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