Originally posted by longwood
...I would buy a least five different stocks to make sure i am diversified.... I would pick: 1. an Oil stock 2. a brand name blue chip... 3. a financial 4.a tech stock 5. one speculative stock from an undiscovered/undervalued company.
You need 72 stocks in your portfolio to eliminate non-systemic risk. Oil stock are already overvalued. In a rising interest rate environment, like we have now, financial stocks tend to suffer. A speculative/unknown stock is a great way to lose money.
Diversity can be gained by holding an index fund. Then you can start adding individual stocks if you so please. If you want growth stocks then consider a small-cap index. Want value: look at dividends. Want to speculate: consider a biotech index.
But unless you are going to really learn to dissect financial reports and learn how various industries play in the different stages of the economic cycle, you should stay away from individual stocks. But if you really want to spend the necessary time studying all of this, you should get a job in the finance industry and get paid for it.
My suggestion: find a closed-end fund that holds treasury bills and short it, or buy an in-the-money Januaury put.
Hell, if it's Lotto money why not gamble? It's only 10k.
I might take it to the poker table and see if I can go semi-pro.
