Investing 102

[GregWeld]

Originally Posted by CornHusker4Life

Lance's post reminded me of a question that I have been wanting to ask. If Lance owns 11 stocks with each being 5% of his total wouldn't that be 55% total?

If I have $20,000 in the market and own 10 stocks with each having $2,000 value per stock my percentage is 10% per stock. How do I get down to 5% per stock without adding more stocks to get to 20 total stocks at 5% each =100%.

I hope this makes sense.

Thanks, Jarrod

Jarrod ---- The 5% per investment is a "goal" -- this goal is very hard to obtain until you're at about $100,000 total invested. At that point - 20 stocks with about $5,000 gets you there.

Now --- Everyone needs to remember that this investment goal can include more than just stocks -- because what it's really trying to say to people is that you don't want to have too much RISK in any one thing that could possibly do real damage to your investments. If one 5% investment went to ZERO -- it's really not a huge loss -- versus if you had 35% in one thing... so it's really nothing more than a guiding point.

[CornHusker4Life]

Originally Posted by GregWeld

Jarrod ---- The 5% per investment is a "goal" -- this goal is very hard to obtain until you're at about $100,000 total invested. At that point - 20 stocks with about $5,000 gets you there.

Now --- Everyone needs to remember that this investment goal can include more than just stocks -- because what it's really trying to say to people is that you don't want to have too much RISK in any one thing that could possibly do real damage to your investments. If one 5% investment went to ZERO -- it's really not a huge loss -- versus if you had 35% in one thing... so it's really nothing more than a guiding point.

That is what I was thinking. I did not want to own 20 stocks with $33,000 in the market just to get to the 5% goal. Time to max out my wife and Is Roths for the year. Thanks Fellas