Jolie Rene....I agree...I am going to put in a clip from The Bull Market Stock Report (BTW, an excellent free end-of-the-day analysis on the Market and Tech Stocks in particular).....This clip is what they have to say about investing...Basically it says to CONCENTRATE your holdings is how to Build Wealth...To DIVERSIFY is how to protect it...Great, huh?....That's why I'm heavily concentrated in AOL, even though I own others.
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<<2. CONCENTRATION OF ASSETS CREATES WEALTH, DIVERSIFICATION PROTECTS
WEALTH
Many investors spend countless hours analyzing charts, looking at the
market, worrying about macroeconomic factors. The goal should be to
focus on developing expertise in one particular industry, and then
buying those stocks which are the leaders in that industry.
Developing confidence in your knowledge of an industry and its
fundamentals will preclude you from being scared out of your stocks
during times of market turbulence. More importantly, it will give you
the confidence to concentrate your assets in a few select investments
which represent your best ideas. The more diversified you are, the
more difficult it is to outperform the market. Why? Because it is
impossible to become an expert in a large number of stocks; there is
simply too much information to absorb and not enough time to do it.
Obviously, not all investors have the risk tolerance to concentrate
their dollars into several stocks. However, everyone can and should
overweight their best ideas in their portfolio, the extent to which
depends on many individual factors, the most important of which is
your long term objectives. Your goals determine your strategy. Thus,
if you are looking to take $100,000 at age 25 and retire by 40, you
are not going to do it by investing in mutual funds. Conversely, if
you are 65, you should not be putting all your assets into one stock,
but there is no reason not to take the capital you may have in the
market (which should probably be no more than 50% of your net worth)
and put it into your best 4 or 5 ideas.>>
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Regards, George
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