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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: gdichaz who wrote (25809)	6/4/2000 2:23:00 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

the older you are, the more bonds and CD's you should hold, fits the old days In addition to the issue of risk and the personality of the investor, it also matters a great deal what the investor's position and goals are. Someone who has assured income sufficient to maintain their standard of living can much more readily afford to take a riskier, or more volatile, position with the balance of their portfolio than someone who is depending on the performance of that portfolio each and every year for income. I also think that one needs to contrast risk and volatility. All tech stocks are likely to be volatile and someone depending on them for income is going to have to bear that in mind. But I see gorillas as relatively low risk over the long term, especially when you figure in the high returns. If one invests in an instrument with an average 10% annual return, but a 3 sigma variation of +/-20%, then one is going to spend some of the time losing money. But, an instrument with a 50% average annual return and a 3 sigma range of +/-40% is actually much lower risk, despite the increased volatility. GG stocks aren't quite that simple, but we have certainly seen this principle illustrated in the recent drop where it was only those of us unfortunate enough to have bought in a few months back who actually went underwater, while those holding for a year merely saw gains reduced.