LogFAQs > #1171636

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TopicAnyone interested in a stock/financial discussion topic?
GunMage
05/30/12 4:41:00 PM
#58:


SmartMuffin is right, Ness.

In general, the younger you are, the bigger the portion of your portfolio that should be in stocks. Stocks can be further broken up into different categories, such as growth or value, and small-, mid-, and large-cap. Asset allocation by itself is a huge topic that can be better explained at financial advice sites. The gist is that if you have all your bases covered, your portfolio will do well, no matter which sector of the market is hot at any given time.

Amazon may turn out to be a good investment, but in my opinion, you don't want to throw a big portion of your portfolio into it because it is a high risk, high volatility stock. If a big downturn happens, a name like Amazon is going down in a big way. Had something similar happen to me four years ago, and that was not fun. Granted, if something like four years ago happens, just about everything will get dragged down, but momentum stocks will get clobbered while blue chip dividend names will usually have much shallower dips because a lot of people want to get into those stocks when they're that low and touting a relatively high yield. Having one or more of these is a good foundation to start building a new portfolio.

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