Comments on: A Look At Typical Financial Advice And Why I Started This Blog http://20smoney.com/2008/06/04/a-look-at-typical-financial-advice-and-why-i-started-this-blog/ A Guide to All Things Money For 20-Somethings: Investing, Finances, Careers, Retirement, Real Estate Fri, 21 Nov 2008 09:45:38 +0000 http://wordpress.org/?v=2.5 By: GM http://20smoney.com/2008/06/04/a-look-at-typical-financial-advice-and-why-i-started-this-blog/#comment-149 GM Wed, 04 Jun 2008 13:22:34 +0000 http://20smoney.com/?p=89#comment-149 I've come to learn (at age 23) that people on CNBC and places and many investors are just as clueless about the market as I am. I wonder how that Billionaire investor felt after loosing almost a billion dollars in Bear Stearns? Someone didn't do their homework....or is just plain clueless. -Keep up the great blog -GM I’ve come to learn (at age 23) that people on CNBC and places and many investors are just as clueless about the market as I am.

I wonder how that Billionaire investor felt after loosing almost a billion dollars in Bear Stearns? Someone didn’t do their homework….or is just plain clueless.

-Keep up the great blog

-GM

]]> By: kevin duffey http://20smoney.com/2008/06/04/a-look-at-typical-financial-advice-and-why-i-started-this-blog/#comment-148 kevin duffey Wed, 04 Jun 2008 12:43:59 +0000 http://20smoney.com/?p=89#comment-148 Great comment... I agree with your points. I think when I talk about not diversifying it's more geared towards those who own stocks in sectors simply for the sake of diversification. If you have stocks that you love and it results in a diversified portfolio, then that is great. But simply adding a home builder stock right now for the sake of diversification is ridiculous. My desire is to find the winning areas/sectors/stocks and bet significantly on them. Sure, there's more risk. But I'll learn from my failures and win big on my successes. Great comment… I agree with your points. I think when I talk about not diversifying it’s more geared towards those who own stocks in sectors simply for the sake of diversification. If you have stocks that you love and it results in a diversified portfolio, then that is great. But simply adding a home builder stock right now for the sake of diversification is ridiculous.

My desire is to find the winning areas/sectors/stocks and bet significantly on them. Sure, there’s more risk. But I’ll learn from my failures and win big on my successes.

]]> By: GM http://20smoney.com/2008/06/04/a-look-at-typical-financial-advice-and-why-i-started-this-blog/#comment-147 GM Wed, 04 Jun 2008 12:38:26 +0000 http://20smoney.com/?p=89#comment-147 The reason you have so many articles about "Starting Early" is because its easy to write them. You can put non-technical garbage that the ordinary Joe can understand. Unfortunately, the diversification issue is not that simple. You can't just say, "Don't Diversify." That would mean you are an economic expert, a great financial analyst, and a wonder stock picker. There aren't too many 20 year olds that are looking to put in that time and effort to be one. Have you done any backtesting on just some simple portfolios? I've done a little, not a research paper worth, but a pinch. Look at the SPY for the past 8 years and take a look at any 9 or so Spider family various asset ETF's. Its not comparing apples-to-apples, but just to give one a rough idea. You can do the same comparison with DIA/QQQQ. Granted, for every portfolio that I create, you can give me a stock like SOLF that made over 100% for the past three years to back up your point, but like I said, we can't all be stock-pickers. Remember, long run. The reason you have so many articles about “Starting Early” is because its easy to write them. You can put non-technical garbage that the ordinary Joe can understand.

Unfortunately, the diversification issue is not that simple. You can’t just say, “Don’t Diversify.” That would mean you are an economic expert, a great financial analyst, and a wonder stock picker. There aren’t too many 20 year olds that are looking to put in that time and effort to be one.

Have you done any backtesting on just some simple portfolios? I’ve done a little, not a research paper worth, but a pinch. Look at the SPY for the past 8 years and take a look at any 9 or so Spider family various asset ETF’s. Its not comparing apples-to-apples, but just to give one a rough idea. You can do the same comparison with DIA/QQQQ.

Granted, for every portfolio that I create, you can give me a stock like SOLF that made over 100% for the past three years to back up your point, but like I said, we can’t all be stock-pickers.

Remember, long run.

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