September 14, 2007, Newsletter Issue #83: When Diversification Goes Too Far

Tip of the Week

Everyone knows that investing in too few companies will expose you to a lot of risk. However, investing in too many companies also has its risks.

In order to manage your investment portfolio optimally, avoid adding diversity for the sake of diversity. Only invest in as many stocks as you can reasonably keep track of. Keeping track of a stock includes reading annual reports and other investor information and staying on top of relevant industry news.

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