Hi Pressly,
You seem like the lonely wolf putting out a bunch of comments with not much reaction from members. Thanks for trying.
Regarding Jim Cramer's rules. I really don't believe on buying individual stocks for the same reason that he mentioned, he said that if you are not willing to spend an hour a week per stock you own keeping up with its new developments you would be better off buying index funds. Since the rule of thumb is that you need between ten and twenty different stocks to be diversified and avoid nonsystemic risks, that means, you have to dedicate between 10 and 20 hours a week to keep up with your portfolio. Furthermore, Bill Bernstein stated that owning ten stocks can either make you very rich or very poor depending on your picks. Peter Lynch said that even if you select carefully, you would be lucky to get more than one stock in five to do really well for you. This means a lot of trading in your horizon prior to capturing the "right" ones. No thanks.
Thank goodness my grandmother got some good advice back when I was just a tyke, and that my father cultivated that seed when it came into his hands. By far, the largest part of my portfolio is a that legacy investment. But I realized having all my nest egg in one basket was not a good idea. Fortunately, it is paying great dividends now, which I am channeling into purchases of other stocks to broaden my base. With over ten years until my planned retirement date, I have time to look for some long term gains.
Pressly
posted by Pressly
about 1 month ago
