Protecting the core

Welcome to the November 2nd issue of Smart Money for the Small Investor. It's important not to get yourself spread to thin. For example, if you only have $25000 to invest, and you have 25 positions, you run the risk of getting slaughtered in commissions and having to hope for large percentage jumps to break even. Furthermore, it becomes difficult to keep up with the news from each of those companies. If you even just spend 5 minutes on each per day that puts you at 10 hours of research per week... and that's probably at a minimum. That's why you need a core of 4-5 holdings that you concentrate 60-80% of your resources into. This way you can keep up on all the news and take advantage of smaller gains. I use my personal portfolio as an example.




Holdings Disclosure: GE, PFE, APA, RTN, TRST, ARNA, CPHD, CERS, SAI