Comments on: Diversification, Weapon Of The Underdogs http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/ A Vancouverite's journey to financial freedom. Fri, 21 Nov 2008 22:12:10 +0000 http://wordpress.org/?v=2.1.2 By: ThickenMyWallet http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-205 ThickenMyWallet Tue, 29 May 2007 18:14:13 +0000 http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-205 The question is, however, if you are only beginning to invest with a modest amount of money do you diversify immediately and end up with a lot of little eggs in your basket or do you concentrate on two or three investments to concentrate on? The question is, however, if you are only beginning to invest with a modest amount of money do you diversify immediately and end up with a lot of little eggs in your basket or do you concentrate on two or three investments to concentrate on?

]]> By: FourPillars http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-207 FourPillars Tue, 29 May 2007 22:52:18 +0000 http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-207 Nice summary of diversification. ThickenMyWallet - my strategy for someone who is making contributions that are fairly large in proportion to the size of their portfolio (ie just starting out) is not too worry about diversification. The way I look at it, you can count the short term future contributions as part of the current asset allocation. For example - if someone wants to have a portfolio of 50% Cdn eq and 50% US equity and has a portfolio of $0 but starts contributing $500/month. Within a year they are going to have about $6000 in their portfolio so I don't see anything wrong with them just saving up and buying one security or fund at a time. Ie $3000 in Cdn first and $3000 in US second. It wouldn't really matter for mutual funds but if they were buying ETFs or stocks then it would apply. Nice summary of diversification.

ThickenMyWallet - my strategy for someone who is making contributions that are fairly large in proportion to the size of their portfolio (ie just starting out) is not too worry about diversification. The way I look at it, you can count the short term future contributions as part of the current asset allocation.

For example - if someone wants to have a portfolio of 50% Cdn eq and 50% US equity and has a portfolio of $0 but starts contributing $500/month. Within a year they are going to have about $6000 in their portfolio so I don’t see anything wrong with them just saving up and buying one security or fund at a time. Ie $3000 in Cdn first and $3000 in US second. It wouldn’t really matter for mutual funds but if they were buying ETFs or stocks then it would apply.

]]> By: Financial Jungle Guy http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-209 Financial Jungle Guy Wed, 30 May 2007 06:14:49 +0000 http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-209 If you're just starting out, your greatest asset is likely your ability to earn income, rather than the tiny portfolio. As FourPillars alluded, it should be fine to relax on diversification initially as long as you're building toward it. If you’re just starting out, your greatest asset is likely your ability to earn income, rather than the tiny portfolio. As FourPillars alluded, it should be fine to relax on diversification initially as long as you’re building toward it.

]]> By: Canadian Capitalist http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-211 Canadian Capitalist Wed, 30 May 2007 12:02:48 +0000 http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-211 Ah, the concentration vs. diversification debate. I am firmly in the diversification camp and find it silly to advocate concentration to average investors. A minor point: though the Berkshire portfolio has 40+ stocks, the bulk of it is in fact concentrated in a handful of names. Ah, the concentration vs. diversification debate. I am firmly in the diversification camp and find it silly to advocate concentration to average investors.
A minor point: though the Berkshire portfolio has 40+ stocks, the bulk of it is in fact concentrated in a handful of names.

]]> By: The Financial Blogger http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-212 The Financial Blogger Wed, 30 May 2007 12:48:47 +0000 http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-212 I Personally think that investing in mutual funds is a good stat when you don't have much money to invest. However, when you have more money, you can concentrate around 30% of your portfolio into one industry and hopefully make some good money. In order to do such things, you must not be afraid of losing money! FB. I Personally think that investing in mutual funds is a good stat when you don’t have much money to invest. However, when you have more money, you can concentrate around 30% of your portfolio into one industry and hopefully make some good money. In order to do such things, you must not be afraid of losing money!
FB.

]]> By: Josh Mullineaux http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-230 Josh Mullineaux Fri, 01 Jun 2007 07:07:58 +0000 http://financialjungle.com/2007/05/29/investing/diversification-weapon-of-the-underdogs/#comment-230 Great Blog. First time reader. It's refreshing to read about people who are taking their financial future seriously. Your knowledge and research skill seems to be quite remarkable. I look forward to reading more of your posts! Great Blog. First time reader. It’s refreshing to read about people who are taking their financial future seriously. Your knowledge and research skill seems to be quite remarkable. I look forward to reading more of your posts!

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