Urging a diversified portfolio, badon.
"Restaurants" is exactly the reason. You wouldn't invest all of your money in a restaurant that you weren't running yourself (Planet Hollywood? Boston Chicken?) and the reason is that more than 80 percent of them fail. Now, CMGI isn't going to fail, but it won't be on a roll every day, either. Just look at the chart:
clearstation.com
Now, I'm not saying you can't be somewhat aggressive if you have the tolerance for risk and volatility, especially if you're young and your investing goals are long term. But "smart money" diversifies in order to even things out and protect itself from cyclicality, sector rotation, mood swings, economic disruptions and even, alas, "bad government." A couple of dividend payers can't hurt, either.
So start with this model and play with it; of the amount you invest in stocks, which might be 80-85 percent of your investable assets:
25-30 percent Internet (80 percent "first-tier")
20-25 percent "old tech"
20-25 percent drugs/biotech/healthcare
20-25 percent financial/brokerage
Remember, what you're trying to do is beat the averages, not be a "hero" or a stock jockey. For inspiration, you might enjoy reading Warren Buffet's letter to shareholders:
berkshirehathaway.com
Hope this helps. Let us know how you make out.
BAM |
