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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: Morpher who wrote (1349)	12/2/1997 7:07:00 PM
From: TFF	Read Replies (1) \| Respond to of 12617

Morpher: Basic portfolio management states that a portfolio that is made up of 1-5 stocks has much greater return potential than one made up of 12 -15 stocks. Once you carry 12- 15 positions you will most likely replicate returns experienced by the general index of which those stocks are chosen. You will notice that the vast majority of hedge fund and mutual fund managers perform at or below the average return on the broader indices that they follow. The reason being that with the amount of money they have to invest they MUST be broadly diversified. The same would hold true for a diversified position trader. The daytrader is in a unique situation in that he manages, by Wall Street standards, a very small porfolio - maximum 1-2 million. Assuming he has a concentrated portfolio he has much greater chance of larger returns than hedge funds,mutual funds, or diversified portfolios of stocks held by positon traders.