Posted: 10 month(s) and 17 days(s) ago   |   1 Comment(s)   |   Rating: 0 0
Posted by: WallStNick

The Motley Fool published an article today with a few wise words for investors thinking about building a well-performing portfolio.

The focus of the article was diversification--making sure the stocks in your portfolio span market caps, sectors, geographies and styles. This should help reduce the overall volatility of your portfolio, and your potential losses. But make sure not to over diversify. "A portfolioconcentrated around a smaller group of stocks.... has the opportunity to outperform the market," the article stated.

This kind of concentrated diversification strategy has worked pretty well for the Oracle of Omaha. "In the 1970s, (Warren Buffett) invested $11 million in the Washington Post, which has turned into more than $1 billion. In teh wake of Black Monday in the late 1980s, Buffett started buying Coca-Cola--an investment that has earned some 15% annual returns," the article stated.

According to Peter Lynch, onetime head of Fidelity Magellan, "It only takes a handful of big winners to make a lifetime of investing worthwhile."  

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