ENVIRONMENTAL BASE NETWORK
ENVIRONMENTAL BASE NETWORK
The Meta-Forum of Environmental Forums
Homepandora bracelets pandora charms pandora jewellery
3 posters
Message [Page 1 of 1]
3 Understanding Stock Diversification Tue Aug 23, 2011 6:03 am
commoditytips
You want your investments spread over large, medium and small companies in a variety of industries. It is especially important to watch the relationship between the stocks so they are not all affected by the same economic factors.Value of diversification in reducing risk in our portfolio, but be sure you understand that there are two types of diversification.
The purpose of diversification is to reduce volatility and improve overall performance. It works if you do diversification correctly.
The first type of diversification is the one most commonly understood as “don’t put all you eggs in one basket.”
This simply means don’t just own one or two stocks. One common way people get in trouble is owning too much of their employer’s stocks.
Good Deal
You may get a good deal on company stock and load up in your retirement fund and buy more for your investment fund because you believe in your company.
It may even seem disloyal not to buy lots of company stock. However, it is not in your best interest if most or your entire portfolio in your company’s stock. Think Enron.
To be truly diversified in your stock selection, you need to own stocks in different industries (even different countries) and in different size companies.
You want your investments spread over large, medium and small companies in a variety of industries. It is especially important to watch the relationship between the stocks so they are not all affected by the same economic factors.
mcx tips free trial || share tips free trial
The purpose of diversification is to reduce volatility and improve overall performance. It works if you do diversification correctly.
The first type of diversification is the one most commonly understood as “don’t put all you eggs in one basket.”
This simply means don’t just own one or two stocks. One common way people get in trouble is owning too much of their employer’s stocks.
Good Deal
You may get a good deal on company stock and load up in your retirement fund and buy more for your investment fund because you believe in your company.
It may even seem disloyal not to buy lots of company stock. However, it is not in your best interest if most or your entire portfolio in your company’s stock. Think Enron.
To be truly diversified in your stock selection, you need to own stocks in different industries (even different countries) and in different size companies.
You want your investments spread over large, medium and small companies in a variety of industries. It is especially important to watch the relationship between the stocks so they are not all affected by the same economic factors.
mcx tips free trial || share tips free trial
Message [Page 1 of 1]
Similar topics
Permissions in this forum:
You cannot reply to topics in this forum