| Teaching Jobs & English Abroad | ESL Hang Out for all things ESL. |
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Thu 17-Aug-06, 02:15 PM
| #1 (permalink) |
| Junior Member   Join Date: Aug 2006 Nationality: American Occupation: Humanitarian Location: 
Posts: 14
 | Diversifying with stocks I took a course in International Finance in graduate school and one of the lessons that sticks very well in my head is the statistical breakdown showing that diversification dramatically reduces risk, especially if you can find different stocks that do not correlate much with each other. Most financial advisors say that you should own 15 to 20+ stocks, but studies have shown that there is not much difference in risk levels from buying just 8 or 9 stocks. 3 or 4 is a bit minimal, but OK if you can accept that you may totally lose one of them and they are not all in the same industry. I trade for $5 with Ameritrade. |
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Thu 17-Aug-06, 02:17 PM
| #2 (permalink) |
| Junior Member  Join Date: Apr 2006 Nationality: New Zealander Occupation: English Teacher Location: 
Posts: 13
|  I trade with ETrade $5 is quite cheap, but I couldn't be bothered to signup a new account, and when we are talking about trading in parcels of $10K+, what's a few dollars. Ok, will try to keep my magic number to around 5~10. I know diversification is important, but having all your money in stocks doesn't literally equate to diversification.  Having some money in stocks, some in real estate, some in cash, some in bonds etc.. is the real meaning of diversification. |
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Thu 17-Aug-06, 04:28 PM
| #4 (permalink) |
| Junior Member Join Date: Aug 2006 Nationality: American Occupation: Humanitarian Location:
Posts: 14
| Mutual Funds are a scam! Just make sure you don't buy mutual funds! This is one of the biggest scams ever invented. If there is some MF you are interested in, just look it up on the internet to see what stocks/bonds they are buying and then buy the same ones if you want to (or not). There is no reason to pay a management fee to a MF company to make investments for you that you could easily make yourself. To buy a MF you have to go online and buy it in the same way you would buy a stock anyway, so what’s the point? Some index MFs are OK, but I’m talking managed funds here. Even so, you can buy ADRs (spiders, and cubes, etc.) that are the same as buying in to an index MF but without the management fees. |
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Thu 17-Aug-06, 04:32 PM
| #5 (permalink) |
| Junior Member Join Date: Apr 2006 Nationality: New Zealander Occupation: English Teacher Location:
Posts: 13
| I like shares I like shares better. Used to deal in options (short and long selling), but if you have larger sums available, options trading isn't necessary. Used to have Managed Funds in NZ but sold them all. Only good thing about managed funds is that you don't have to buy 10+ stocks to take advantage of diversification. But in the meantime, you are paying the management fees for this convenience.  |
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Sat 14-Apr-07, 07:28 AM
| #6 (permalink) | |
| ESL Newbie  Join Date: Apr 2007 Occupation: IT specialist Location: 
Posts: 1
| Re: Diversifying in life Quote:
was surffing through and found you so decided to wanted to hellow ,ye you are right theres greater thinks in life than money. your joe nary
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