Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Investor2 who wrote (1476)	9/9/1997 12:56:00 AM
From: sea_biscuit	of 42834

RE: I believe that a simple rule such as "a portfolio of 8 to 12 stocks (in different industries) is adequately diversified" is nonsense in today's world. Try saying that to Warren Buffett! And I am sure that his portfolio has produced better returns than most mutual funds, if not all mutual funds, over the last 10 to 20 years. The biggest argument against over-diversification is that a small portfolio can be "lifted" by a single stellar performer, while in a large portfolio, the high-flyer is very easily neutralized by a bunch of under-performers. Besides, it is difficult to keep a close watch on anything more than a dozen companies. Anyway, if Brinker were recommending investors to buy load-funds or funds with high expenses, one could give that as an explanation for the 4% rule, because most investors don't have enough money to spread over 25 stocks. However, since he doesn't do that, we will have to take it as just a matter of opinion. Dipy.

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