| Remember when we first began to learn investment jargon? I tossed around the word "diversified" with the best of 'em. For some reason, using that word empowered me into believing that I really could understand that which had previously been relegated to the ephemeral world.
The stock market was a world filled with people whom I truly admired. They had knowledge that I knew I would never have. It appeared that learning about this entity would require years and years of study.
Years and years translated into "time" for me and that is something that I cannot take for granted anymore. It was a hopeless dream that I would never achieve and so I just sat on the sidelines and admired those who had this knowledge (and often made money from this knowledge).
And then suddenly, out of nowhere, I'm throwing around the word "diversified." And everybody everywhere knows that using THAT word means you are one of the players in the stock market game!
Where else would you use that word?
I don't "diversify" my son's activities. I don't use the word "diversified" when I look at the 17 different kinds of cereal boxes in my kitchen cabinets. And I am certainly incapable of "diversifying" my time between working, housework and parenting.
Nope…when we use that word, we are automatically lifted to the status of one who is in the know as regards the stock market jungle.
And sadly, I was using that word and really never understood HOW to diversify my holdings…so let's take a look.
Actually, I had a vague idea. I believe spreading our money around in different segments of the economy and amongst specific companies exemplifies diversity. Now…exactly what segments, which companies and how much?
First the segments. BUYANDHOLD has a nice listing of the specific categories and the companies that are listed within each category. It is extremely important to know exactly where our companies fall, as we look towards diversification.
I finally stopped and placed my companies in their respective categories and was wholly taken aback! My companies that I thought were "Technology/Internet" companies are actually "Medical/Healthcare" and "Consumer Goods."
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We've mentioned this before, but it's worth repeating: Discussion Boards offer a great forum for individuals to communicate with one another. However, please be sure to verify any information you receive from these types of forums before you act on that information. Your decision to buy or sell should be based on sound fundamental research. |
This is one of those "duh" lessons that we need to stop and look at now Moms. Please take a few minutes and find out where your companies are listed within the categories on the BUYANDHOLD web page. And if you're not using BUYANDHOLD, take the time to locate this information at your investment site.
As I indicated earlier, the money placed in my "Technology/Internet" companies is the riskier side of my personality. I need to insure that some funds are placed in the "tried and true" of the Dow, for example.
We can't know this information if we're making assumptions…and I most certainly was. Check now, and with that information in hand, we'll continue to look towards diversifying our portfolio.
And now I'm off to "diversify" my son's collection of cereal boxes. How do I do that? The same way most Mothers do…we take small amounts of cereal in 17 boxes and add it to make just 5 boxes. Makes for an interesting new brand of cereal. I like to call it eclectic and thankfully, my son never notices.
Thank you for joining me,
Joyce |
