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Technology Stocks : Dell Technologies Inc.
DELL 133.20+5.7%Nov 26 3:59 PM EST
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To: HoyaBob who wrote (52089)7/18/1998 8:38:00 AM
From: Geoff Nunn  Read Replies (1) of 176387
 
Does anybody think this {failure to diversify} is short-sighted?

That's hard to answer without knowing more about your tolerance for risk. Diversification is a sound, common sense investment strategy that makes sense for the average investor. The fact that you've done better for yourself by not diversifying doesn't prove you exercised sound judgment. Perhaps your judgment is no better than average (I don't mean this personally) and you were just lucky. Don't forget, a lot of outcomes in the stock market are luck intensive.

Let's not forget that roughly half of all investors will out-perform the market averages each year. I don't believe we should assume all of them are skillful. Nor should we assume that the 50% who under-performed the averages were stupid. Many were just unlucky. The case for buying the S&P index fund is that you can insure against falling into the bottom 50%, and do well in overall return assuming the economy continues to grow.

Don't get me wrong, I like Dell and am willing to hold it even though it has become a larger percent of my portfolio. I haven't diversified despite the higher risk-- although there is the high cost to diversifying to consider (capital gains taxes). Quite frankly, I do wonder whether some on this thread who have said they are buying more Dell shares (on margin?), even as it becomes more dominant in their portfolio, may be taking on more risks than they've bargained for. That's their choice... and I do understand why they love the stock.

Go Dell!!!

Geoff

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