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The need to be diversified by Jim Cramer

Being diversified is an absolute must by Cramer on CNBC Mad Money.  As a person that has violated this rule because it is hard not to chase a large return.   To not put all your money in one basket is hard to do.  By diversifying we limit our upside and downside.  This is risk management.  It keeps us in the game.  Cramer advises owning at least five top stocks in five different sectors to ensure diversification.  You have to protect yourself from yourself.  You will lose money if you break your rules.   We are human and not perfect so we need rules.  Frailty of humanity makes us go against stocks.  We need to not be arrogant.    Cramer also advised against ever investing in stock tips because it is either  bad information or could be illegal insider information.    I have watched Cramer for a couple of years.  If you just use a filter to listen to Cramer it is a great show.  Cramer also advises investing incrementally. 

(Friday February 26th update,  any small website is going to contain incomplete information, often biased.   In my opionion any t.v. channel is also going to have bias and agenda as Cramer would.  The world can make mistakes. )

  Entertainment purposes only.  Help others, ask questions later.

February 20, 2008 - Posted by | Uncategorized | , , , , , , , , , , ,

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