[mage lang="" source="flickr"]how to choose penny stocks[/mage]
How many stocks do you need in your portfolio to be diversified?
It seems like whether you have $10,000 or $10,000,000, if you were to choose around 10 stocks (not penny stocks) in different sectors, you’d be diversified enough. Any thoughts?
According to modern porfolio theory, there is little additional reduction of risk beyond 20. There is signficant reduction in risk by adding addional securities below 10. So a good rule of thumb is somewhere between 10 and 20.
One thought is this. No only different sectors but also different geographic areas and different economies. If all of ones money is invested in U S securities, then the corrolation of investments is much greater than it would be between securities of say other regions.
Robert Swanson Cleaned Up With Penny Stocks $1,975.39/wk, Interested In What Method He Used?