Portfolio diversification

Portfolio diversification can be difficult for the small investor. Often, we can't take down enough shares to make any real money unless we throw everything we have behind a couple of positions. This webisode focuses on how to diversify when the funds are tight.

Conclusion: Diversification doesn't make you money, it keeps you from losing your money! It's about damage control and limiting risk, and is very important! Diversify with Mutual Funds then make money with stock picking! You should have three pools of money:

1. Retirement: Very diversified - Do not mange it yourself!!!
2. Discretionary: Moderately diversified - This is where you make your money!!!
3. Cash: You'll need it to take down positions when your discretionary fund is all tied up.

Disclosure: Holdings in Microsoft (MSFT), Riverbed (RVBD), and General Electric (GE)